Critical Survey: New Relic (NEWR) and Radware (RDWR)

Radware (NASDAQ: RDWR) and New Relic (NYSE:NEWR) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk.

Valuation and Earnings

This table compares Radware and New Relic’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Radware $211.37 million 4.55 -$7.49 million ($0.12) -180.00
New Relic $263.48 million 15.89 -$61.07 million ($1.10) -68.67

Radware has higher earnings, but lower revenue than New Relic. Radware is trading at a lower price-to-earnings ratio than New Relic, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Radware and New Relic’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Radware -3.55% -1.77% -1.20%
New Relic -16.17% -25.22% -13.61%

Risk and Volatility

Radware has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, New Relic has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Radware and New Relic, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Radware 0 0 6 0 3.00
New Relic 0 4 8 0 2.67

Radware presently has a consensus target price of $22.33, suggesting a potential upside of 3.40%. New Relic has a consensus target price of $66.42, suggesting a potential downside of 12.08%. Given Radware’s stronger consensus rating and higher possible upside, equities analysts plainly believe Radware is more favorable than New Relic.

Insider & Institutional Ownership

64.0% of Radware shares are owned by institutional investors. Comparatively, 75.8% of New Relic shares are owned by institutional investors. 21.6% of Radware shares are owned by insiders. Comparatively, 23.1% of New Relic shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Radware beats New Relic on 8 of the 14 factors compared between the two stocks.

Radware Company Profile

Radware Ltd. develops, manufactures, and markets cyber security and application delivery solutions for applications in virtual, cloud, and software defined data centers worldwide. The company offers application and network security solutions, such as DefensePro, a real-time network attack prevention device; AppWall, a Web application firewall; and DefenseFlow, a cyber command and control application. It also provides cloud-based emergency response team, attack mitigation, and firewall services; and subscription-based security update and RSA fraud action feed. In addition, the company offers application delivery solutions comprising Alteon NG, an application delivery controller/load balancer for Web, cloud, and mobile based applications; LinkProof NG, a multi-homing and enterprise gateway solution for connectivity of enterprise and cloud-based applications; and FastView, a Web performance optimization and acceleration for end-user devices and browsers. Additionally, it offers APSolute Vision, a management and monitoring tool for company's application delivery and application security solutions; application performance monitoring, an end-to-end monitoring solution; and vDirect, service orchestration and automation engine designed for software-defined data centers and clouds. The company sells its products primarily to independent distributors, including value added resellers, original equipment manufacturers, and system integrators. Radware Ltd. was founded in 1996 and is headquartered in Tel Aviv, Israel.

New Relic Company Profile

New Relic, Inc., a software-as-a-service company, provides digital intelligence products worldwide. The company's cloud-based platform and suite of products include New Relic Digital Intelligence Platform, which enables organizations to collect, store, and analyze data. It provides New Relic Application Performance Management that offers visibility into the performance and usage of server-based applications, such as data pertaining to response time, transaction throughput, error rates, transactions, and user satisfaction; New Relic Mobile, which provides code-level visibility into the performance of mobile applications running on the iOS and Android mobile operating systems; and New Relic Browser, a product that monitors the page view experiences of actual end-users for desktop and mobile browser-based applications. The company also offers New Relic Synthetics, which simulates usage and reproduces business-critical functionality that enables its users to test their software throughout the development life cycle; and New Relic Infrastructure that provides information technology operation teams with the visibility into the health performance of their infrastructure. In addition, it provides New Relic Insights that enables technology and business users to perform real-time analysis; New Relic Alerts, a centralized notification system for managing alert policies and alert conditions; New Relic Plugins, which offers a plugin architecture, including application programming interfaces and software development kits for customers and partners to embed and extend its solution into their products; and real-time dashboards for tracking business metrics from a set of application sources, as well as live-state server configuration monitoring across cloud infrastructure. The company sells its products through direct sales organizations, online and offline sales, and marketing activities. New Relic, Inc. was founded in 2007 and is headquartered in San Francisco, California.

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