New Relic: Stock Is Cheap, But Growth Rates Leave Much To Be Desired (NYSE:NEWR)

Investment Thesis

New Relic (NEWR) trades for 5x forward sales.

On the surface, New Relic appears to be very cheaply valued. However, the further we dig, the more challenging it becomes to find this investment attractive.

New Relic was historically growing very fast, into a rapidly expanding market. However, right now, even though the market continues to expand, New Relic is being left behind, with its unattractive dollar-based new expansion rate.

It will be difficult to attract new shareholder holders to this stock. Here’s why:

Compelling Business Prospects

New Relic is an Application Performance Monitoring (”APM”). It allows customers to collect and analyze vast quantities of data flowing through and about their software.

New Relic is well-positioned to benefit from companies’ ongoing secular shift on their digital journeys.

As companies are forced to digitalize and adopt cloud technologies in order to remain nimble, New Relic supports these customers by maintaining

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