Earnings To Watch: New Relic (NEWR) Reports Q3 Results Tomorrow

Petr Huřťák /
2023/02/06 3:00 am EST

Application performance management software company New Relic (NYSE:NEWR) will be reporting results tomorrow after market close. Here's what to expect.

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

Is New Relic buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting New Relic's revenue to grow 14.4% year on year to $232.9 million, slowing down from the 22.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.15 per share.

New Relic Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.66%.

Looking at New Relic's peers in the software development segment, some of them have already reported Q3 earnings results, giving us a hint what we can expect. Dynatrace delivered top-line growth of 23.5% year on year, beating analyst estimates by 4.46% and F5 Networks reported revenues up 1.93% year on year, missing analyst estimates by 0.05%. Dynatrace traded up 2.75% on the results, and F5 Networks was up 1.46%. Read our full analysis of Dynatrace's results here and F5 Networks's results here.

There has been positive sentiment among investors in the software development segment, with the stocks up on average 23.4% over the last month. New Relic is up 16.1% during the same time, and is heading into the earnings with with analyst price target of $65.17, compared to share price of $64.67.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.