New Relic (NYSE:NEWR) and Avalara (NYSE:AVLR) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
Risk & Volatility
New Relic has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Avalara has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.
Earnings & Valuation
This table compares New Relic and Avalara's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| New Relic | $599.51 million | 6.25 | $-88,940,000.00 | ($1.08) | -55.00 |
| Avalara | $382.42 million | 32.98 | $-50,210,000.00 | ($0.59) | -250.25 |
Avalara has lower revenue, but higher earnings than New Relic. Avalara is trading at a lower price-to-earnings ratio than New Relic, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
86.0% of New Relic shares are owned by institutional investors. Comparatively, 88.6% of Avalara shares are owned by institutional investors. 17.4% of New Relic shares are owned by company insiders. Comparatively, 4.0% of Avalara shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares New Relic and Avalara's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| New Relic | -20.65% | -26.93% | -8.39% |
| Avalara | -10.89% | -6.97% | -4.52% |
Analyst Ratings
This is a summary of recent ratings for New Relic and Avalara, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| New Relic | 3 | 10 | 5 | 0 | 2.11 |
| Avalara | 0 | 1 | 11 | 0 | 2.92 |
New Relic currently has a consensus target price of $70.0625, indicating a potential upside of 17.48%. Avalara has a consensus target price of $190.8571, indicating a potential upside of 32.91%. Given Avalara's stronger consensus rating and higher probable upside, analysts plainly believe Avalara is more favorable than New Relic.
Summary
Avalara beats New Relic on 10 of the 14 factors compared between the two stocks.
