- We see growth opportunities through client-base expansion, driven by the adoption of New Relic Edge and AI in FY 2021 and beyond.
- New Relic also onboarded four new executives, demonstrating a full commitment to fixing the sales execution issue in Q1 2020.
- As we see potential growth and margin expansion opportunity in the medium term, we are upgrading our neutral rating to overweight.
In our recent note on New Relic (NEWR) in Q1 2020 last September, we highlighted the potential investment risk considering the management shakeup in the company. We rated the stock neutral at the time as we continued to believe in the business's potential and strong positioning in the attractive APM (Application Performance Monitoring) and observability spaces. New Relic has since continued to perform above our expectations, which increases our conviction in the stock further.
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