IBD Stock Analysis
- Stock now emerging from a consolidation with buy point of 80.98
- Early entries available for aggressive investors at 75.50 and 76.25
- Relative Strength Rating is 93 out of 99; Composite Rating is 92
Industry Group Ranking
* Not real-time data. All data shown was captured at
2:39PM EDT on
IBD Stock Of The Day New Relic (NEWR) often describes what it does as providing observability, or giving customers the ability to measure whether what they are trying to achieve is working. This year, that approach has helped NEWR stock rise.
The company makes data analytics software, which extracts and analyzes all manner of data in order to draw conclusions. In addition, it aims to uncover hidden patterns or unknown correlations. It also tries to discover emerging market trends and customer preferences.
Engineers use the company’s data analytics software to measure the planning, building, deployment and running of businesses through a cloud-based, software-as-a-service platform.
The platform gives engineers insight on projects “with data, not opinions,” as New Relic likes to say. With it, companies also can find and fix problems faster and speed up business projects.
NEWR Stock: The Source Of Truth For Engineers
“Our mission is to be the source of truth for all engineers to make decisions with data, not opinions, at every stage of the software lifecycle,” the company says in its mission statement.
NEWR stock is in the process of emerging from a consolidation with a buy point of 80.98 as it finds support from the 50-day moving average.
For aggressive investors, an early entry above Tuesday’s high of 75.50 — near the 50-day moving average and clearing a trendline — has potential. Another early entry point is around 76.25.
NEWR stock was down 1%, near 73.85, during afternoon trading on the stock market today.
Attractive Features Of NEWR Stock
Among the attractive features of New Relic stock is its relative strength line, which is near its 52-week high. The RS line is a helpful tool for looking at top stocks that could break out soon or build follow-on buy points. But it also can work as a signal that a stock is reaching a top.
Still, the relative strength line can help find the best stocks during a choppy market. It compares a stock’s performance with that of the S&P 500. When the RS line is climbing, it means a stock is outperforming the benchmark index.
NEWR stock has an IBD Composite Rating of 92 out of a possible 99, and a Relative Strength Rating of 93.
Competitors to NEWR stock in the data analytics software field include Splunk (SPLK), Elastic (ESTC) Tableau Software (DATA) and Workiva (WK).
New Relic reported quarterly earnings in early February that beat Wall Street views. Revenue jumped 18% from the year-ago period to $239.8 million, beating estimates of $232.7 million. Further, adjusted earnings of 32 cents per share smashed predictions for 15 cents.
Positioned For Profitable Growth
“We are well-positioned for continued growth,” New Relic Chief Executive Bill Staples said in a written statement with the earnings release. “Profitability is turning into a strength as we accelerate our focus on profitable growth.”
New Relic says it has 15,700 active customers. These include 1,203 customers that spend more than $100,000 per year.
“We are attracting new customers at a rapid pace,” Staples said in the earnings statement. “We are growing our customer base as (clients) expand their observability practices and continue with their digital transformation.”
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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