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Q1 Earnings Outperformers: New Relic (NYSE:NEWR) And The Rest Of The Cloud Monitoring Stocks


Adam Hejl /
2022/06/29 4:35 am EDT
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The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how New Relic (NYSE:NEWR) and the rest of the cloud monitoring stocks fared in Q1.

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 Q1; on average, revenues beat analyst consensus estimates by 3.26%, while on average next quarter revenue guidance was 1.25% above consensus. Tech stocks have had a rocky start in 2022, but cloud monitoring stocks held their ground better than others, with the share price up 2.81% since earnings, on average.

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 $205.7 million, up 19.1% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a significant improvement in gross margin but decelerating growth in large customers.

“We finished FY22 with revenues of $786 million, well above the guidance of $710 million we set a year ago,” said New Relic CEO Bill Staples.

New Relic Total Revenue

New Relic delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The company added 35 enterprise customers paying more than $100,000 annually to a total of 1,099. The stock is up 6.8% since the results and currently trades at $51.03.

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

Best Q1: 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 $363 million, up 82.8% year on year, beating analyst expectations by 7.93%. Despite the stock dropping on the results, it was a very strong quarter for the company, with an exceptional revenue growth and a full year guidance beating analysts' expectations.

Datadog Total Revenue

Datadog achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 240 enterprise customers paying more than $100,000 annually to a total of 2,250. The stock is down 17.1% since the results and currently trades at $98.64.

Is now the time to buy Datadog? 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 $252.5 million, up 28.5% year on year, beating analyst expectations by 2.44%. Despite the solid topline results, it was a weaker quarter for the company, with full-year guidance missing analysts' expectations and underwhelming guidance for the next quarter.

Dynatrace had the weakest full year guidance update in the group. The stock is up 26.8% since the results and currently trades at $41.60.

Read our full analysis of Dynatrace's results here.

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 $67.8 million, up 25.1% year on year, beating analyst expectations by 2.67%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a decline in gross margin.

The stock is up 3.89% since the results and currently trades at $8.

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

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 $85.3 million, up 34.2% year on year, beating analyst expectations by 2.95%. It was a mixed quarter for the company, with decelerating customer growth.

The company added 175 customers to a total of 15,040. The stock is down 6.32% since the results and currently trades at $25.73.

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

The author has no position in any of the stocks mentioned