I guess my basic question here is based around their moat - do we believe they really have one, or is it just based on brand and support? Without a moat, even a company that is executing great is going to find it hard to grow revenue and margin.
Great point, and it is borne out in the numbers. The last several quarters NEWR’s revenue growth has averaged 35%. Nothing to sneeze at, of course, but not the 40%+ or even 50%+ of the companies that are really lighting the world on fire.
Alteryx (AYX), for example, grew revenue 50% in the March quarter. We don’t focus on valuation too much here, but a quick comp shows that NEWR’s PS ratio is 14.5 and AYX’s is 13.0. So AYX is growing much faster and the price is lower. NEWR is expensive.
I still really like NEWR, but I ended up selling my shares to buy other things (like AYX). If you’re not as concentrated, you may have room for NEWR, but I don’t think I’d pick now to load up.
Bear