2345

Cloud Monitoring Stocks Q3 Recap: Benchmarking New Relic (NYSE:NEWR)


Radek Strnad /
2023/01/20 4:03 am EST
Add to Watchlist

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at New Relic (NYSE:NEWR), and the best and worst performers in the cloud monitoring group.

Software is eating the world, increasing organizations’ reliance on digital-only solutions. As more workloads and applications move to the cloud, the reliability of the underlying cloud infrastructure becomes ever more critical, and ever more complex. To solve the challenge, companies and their engineering teams have turned to a range of cloud monitoring tools that provide them with visibility to troubleshoot the issues in real time.

The 5 cloud monitoring stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 3.56%, while on average next quarter revenue guidance was 0.06% above consensus. Investors abandoned cash burning companies since high interest rates will make it harder to raise capital, but cloud monitoring stocks held their ground better than others, with the share prices up 5.45% since the previous earnings results, on average.

Slowest Q3: New Relic (NYSE:NEWR)

With the name being an anagram of its founder, Lew Cirne, New Relic (NYSE:NEWR) makes a monitoring software that collects, scores, and analyses performance data about a client's IT stack.

New Relic reported revenues of $226.9 million, up 15.9% year on year, beating analyst expectations by 1.97%. It was a weak quarter for the company, with revenue guidance for the next quarter and full year missing analysts' expectations.

“Our focused execution against our key priorities enabled us to beat the high-end of our guidance. We continue to innovate rapidly to further expand our all-in-one observability platform,” said New Relic CEO Bill Staples.

New Relic Total Revenue

New Relic delivered the slowest revenue growth and weakest full year guidance update of the whole group. The stock is up 9.22% since the results and currently trades at $56.7.

Read our full report on New Relic here, it's free.

Best Q3: Sumo Logic (NASDAQ:SUMO)

Founded in 2010 by Christian Beegden who went from driving a cab in Germany to landing an internship at Amazon, Sumo Logic (NASDAQ:SUMO) is software as a service data analytics platform that helps companies get insight into what is happening in their servers and applications.

Sumo Logic reported revenues of $78.9 million, up 27.3% year on year, beating analyst expectations by 6.4%. It was a very strong quarter for the company, with a significant improvement in gross margin and a solid beat of analyst estimates.

Sumo Logic Total Revenue

Sumo Logic delivered the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 4.44% since the results and currently trades at $7.52.

Is now the time to buy Sumo Logic? Access our full analysis of the earnings results here, it's free.

Dynatrace (NYSE:DT)

Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.

Dynatrace reported revenues of $279.3 million, up 23.4% year on year, beating analyst expectations by 2.22%. It was a slower quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.

The stock is up 5.35% since the results and currently trades at $36.02.

Read our full analysis of Dynatrace's results here.

PagerDuty (NYSE:PD)

Started by three former Amazon engineers, PagerDuty (NYSE:PD) is a software as a service platform that helps companies respond to IT incidents fast and make sure that any downtime is minimized.

PagerDuty reported revenues of $94.2 million, up 31.2% year on year, beating analyst expectations by 1.85%. It was a mixed quarter for the company, with strong top line growth but decelerating customer growth.

PagerDuty had the weakest performance against analyst estimates among the peers. The company added 91 customers to a total of 15,265. The stock is up 16.9% since the results and currently trades at $26.38.

Read our full, actionable report on PagerDuty here, it's free.

Datadog (NASDAQ:DDOG)

Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) is a software as a service platform that makes it easier to monitor cloud infrastructure and applications.

Datadog reported revenues of $436.5 million, up 61.3% year on year, beating analyst expectations by 5.37%. It was a decent quarter for the company, with exceptional revenue growth but a decline in gross margin.

Datadog pulled off the fastest revenue growth among the peers. The company added 180 enterprise customers paying more than $100,000 annually to a total of 2,600. The stock is down 8.7% since the results and currently trades at $68.

Read our full, actionable report on Datadog here, it's free.

The author has no position in any of the stocks mentioned