New Relic, a company that helps businesses monitor software performance to make better and faster decisions, is the IBD Stock Of The Day. NEWR stock is forming a bullish chart pattern.
New Relic provides a cloud-based suite of software products that enables organizations to collect, store and analyze massive amounts of data in real time. Customers gain increased visibility into their enterprise software to help make data-driven decisions.
"Our mission is to be the source of truth for all engineers to make decisions with data, not opinions, at every stage of the software lifecycle," the company says in its mission statement.
Among the attractive features of New Relic stock is its relative strength line, which is near its 52-week high. The RS line is a helpful tool for looking at top stocks that could break out soon or build follow-on buy points. But it also can work as a signal that a stock is reaching a top.
Still, the relative strength line can help find the best stocks during a choppy market. It compares a stock's performance with that of the S&P 500. When the RS line is climbing, it means a stock is outperforming the benchmark index.
NEWR stock may be forging a flat base just above a bottoming base, with a potential buy point of 80.98. The flat base is considered a bullish chart pattern. On Tuesday, NEWR stock dipped 1.1% to close at 73.69.
NEWR Stock: Quarterly Results Beat Expectations
On Feb. 8, New Relic stock popped 18.5% after posting fiscal third-quarter results that soundly beat estimates. With the move, it cleared a 70.50 buy point from a first-stage consolidation.
New Relic reported adjusted earnings of 32 cents a share in the quarter ended Dec. 31. That was more than double analyst estimates and compared with an 18-cent per-share loss in the year-earlier period.
Revenue climbed 18% to $239.8 million, topping views for $232.7 million.
For its fiscal fourth quarter ending March 31, New Relic expects revenue of $240 million to $242 million, representing year-over-year growth of 17.1% at the midpoint.
The company expects adjusted net income of 20 cents to 23 cents a share, vs. a 24-cent loss in the year-ago period.
NEWR stock ranks fourth among its peers in the Computer Software-Database industry group. Alteryx is No. 1, followed by Oracle and Progress Software.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
