New Relic, Inc. (NEWR) Stock: Here’s Why It’s Headed For The Bottom

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New Relic, Inc. (NEWR) is trending down in the market in today’s trading session. The stock, one that is focused in the technology sector, is presently priced at $101.28 after a move down of -5.44% so far in today’s session. In terms of technology companies, there are a number of aspects that have the potential to generate price movement in the market. News tends to be one of the biggest reasons for the movement. Here are the recent trending headlines surrounding NEWR:

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May-15-19 01:01PM New Relic Is Investing in Its Future
10:57AM Will Amazon, Microsoft, Google Alliances Lift This Big Data Cloud Stock?
03:23AM New Relic Inc (NEWR) Q4 2019 Earnings Call Transcript
12:54AM Edited Transcript of NEWR earnings conference call or presentation 14-May-19 9:00pm GMT
May-14-19 05:25PM New Relic (NEWR) Beats Q4 Earnings and Revenue Estimates

However, when making a decision to invest, investors should look into much more than just news, especially in the ever changing technology space. Here’s what’s happing when it comes to New Relic, Inc..

The Performance That NEWR Investors Have Experienced

While a decline in a single session, like what we’re seeing from New Relic, Inc. might lead to fear in some investors, a single session move by itself should not be the basis of a decision to, or not to, invest in a stock. It is generally smart to dig into trends for a period longer than a single trading session. When it comes to NEWR, below are the returns that investors have experienced:

  • Weekly – In the last 7 days, NEWR has produced a change in value amounting to 0.71%.
  • Past Month – The monthly ROI from New Relic, Inc. works out to 7.82%.
  • Past Quarter – Throughout the past quarter, the stock has produced a return of 1.52%
  • Past 6 Months – In the past 6 months, we have seen a change that works out to 16.25% from the stock.
  • YTD – Since the the last trading session of last year NEWR has produced a ROI of 32.28%.
  • Full Year – Lastly, throughout the last full year, we have seen performance in the amount of 19.66% out of NEWR. Over this period of time, the stock has sold at a high price of -11.76% and a low price of 44.07%.

Crucial Ratios

Looking at a few ratios having to do with a company can provide traders an understanding of just how dangerous and/or rewarding a pick may be. Below are a few of the important ratios to consider when digging into NEWR.

Short Ratio – The short ratio is a measure of short interest. As the ratio climbs, it shows that more investors believe that the price of the stock is headed for declines. Throughout the sector, strong technology stocks can come with a lower short ratio. On the other hand, we also tend to see quite a few short squeezes in the sector. Nonetheless, as it relates to New Relic, Inc., it’s short ratio amounts to 2.94.

Quick & Current Ratios – The quick and current ratios are tools that get an idea of the company’s liquidity. Essentially, they measure If a company is able to pay its debts when they come due based on quick assets or current assets. In the tech sector, many companies are reliant on continued support from investors as they work to bring new technologies to market, these ratios can look damning. However, several good picks in the tech space come with good quick and current ratios. As it relates to NEWR, the quick and current ratios total up to 3.50 and 3.50 respectively.  

Book To Share Value – The book to share value compares the the share price to the current book value of assets that are owned by the company. In this particular case, that ratio equates to 5.71.

Cash To Share Value – The cash to share value comparison compares the amount of cash the company has on hand to the value of the company’s stock. In terms of NEWR, the cash to share value ratio is 12.62.

Show Me The Big Money

Humans that are into investing seem to be infatuated with the term “Smart money follows big money.” It makes sense. Big money became big money by making smart decisions in the market. So, by following the moves of big money institutions and insiders, we can get a glimpse of what market pros think about a stock. When it comes to big money interest in NEWR, here’s what we’re seeing:

Institutions own 83.20% of the company. Institutional interest has moved by 1.39% over the past three months. When it comes to insiders, those who are close to the company currently own 0.60% percent of NEWR shares. Institutions have seen ownership changes of an accumulative -55.76% over the last three months.

Analyst Opinions Of New Relic, Inc.

Although it’s rarely a good idea to unknowingly follow the thoughts of analysts, it is a good idea to use their thoughts in order to validate your own when it comes to making an investment decision in the tech industry. Below are the recent moves that we’ve seen from analysts with regard to NEWR.

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May-15-19 Reiterated Needham Buy $129 → $131
Feb-07-19 Reiterated BMO Capital Markets Outperform $110 → $118
Jan-15-19 Upgrade Morgan Stanley Equal-Weight → Overweight
Dec-13-18 Upgrade JP Morgan Neutral → Overweight
Nov-07-18 Upgrade First Analysis Sec Outperform → Strong Buy $114 → $116

Earnings

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $0.86. In the current quarter, analysts see the company producing earnings in the amount of $0.06. Over the last 5 years, NEWR has generated revenue in the amount of $64.30% with earnings coming in at -11.10%. On a quarter over quarter basis, earnings have seen movement of -26.40% and revenue has seen movement of 35.10%.

Interested In How Many Shares Are Available?

Investors and traders seem to have a heavy interest in the total numbers of shares both available and outstanding. With respect to New Relic, Inc., there are currently 57.24M with a float of 47.53M. These numbers mean that of the total of 57.24M shares of NEWR currently in existence today, 47.53M are available to trade hands in the public space.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to NEWR, the short percent of the float is 4.81%.

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