What Are Analysts Saying About New Relic Inc’s (NYSE:NEWR) Earnings Trajectory?
New Relic Inc’s (NYSE:NEWR) released its most recent earnings update in March 2018, which showed that losses became smaller relative to the prrior year’s level – great news for investors Investors may find it useful to understand how market analysts view New Relic’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for New Relic
Market analysts’ consensus outlook for this coming year seems buoyant, with earnings becoming less negative, arriving at -US$32.17m in 2019.
Although it’s informative understanding the rate of growth year by year relative to today’s value, it may be more valuable analyzing the rate at which the company is growing every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of New Relic’s earnings trajectory over time, be more volatile. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 16.02%. This means that, we can presume New Relic will grow its earnings by 16.02% every year for the next few years.
Next Steps:
For New Relic, there are three important aspects you should further research:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is NEWR worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether NEWR is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NEWR? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
