Comparison of New Relic Inc. (NEWR) and Microsoft Corporation (NASDAQ:MSFT) - The FinHeadLines

Both New Relic Inc. (NYSE:NEWR) and Microsoft Corporation (NASDAQ:MSFT) compete on a level playing field in the Business Software & Services industry. We will evaluate their performance with regards to profitability, analyst recommendations, risk, dividends, institutional ownership, earnings and valuation.

Valuation & Earnings

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
New Relic Inc.	445.58M	13.51	31.02M	-0.51	0.00
Microsoft Corporation	118.46B	7.19	33.54B	4.19	25.69

Table 1 highlights New Relic Inc. and Microsoft Corporation’s gross revenue, earnings per share (EPS) and valuation.

Profitability

Table 2 provides the return on assets, net margins and return on equity of the two firms.

	Net Margins	Return on Equity	Return on Assets
New Relic Inc.	-6.96%	-11%	-4.2%
Microsoft Corporation	28.31%	23.1%	7.4%

Volatility & Risk

New Relic Inc.’s volatility measures that it’s 20.00% less volatile than Standard and Poor’s 500 due to its 0.8 beta. Microsoft Corporation’s 26.00% more volatile than Standard and Poor’s 500 volatility due to the stock’s 1.26 beta.

Liquidity

The Current Ratio of New Relic Inc. is 3.8 while its Quick Ratio stands at 3.8. The Current Ratio of rival Microsoft Corporation is 2.9 and its Quick Ratio is has 2.9. New Relic Inc. is better equipped to clear short and long-term obligations than Microsoft Corporation.

Dividends

Microsoft Corporation offers an annual dividend of $1.76 per share, bundled with 1.61% dividend yield. New Relic Inc. does not pay a dividend.

Analyst Recommendations

The next table highlights the delivered recommendations and ratings for New Relic Inc. and Microsoft Corporation.

	Sell Ratings	Hold Ratings	Buy Ratings	Rating Score
New Relic Inc.	0	0	3	3.00
Microsoft Corporation	0	1	7	2.88

New Relic Inc. has a consensus target price of $116, and a 10.48% upside potential. Meanwhile, Microsoft Corporation’s average target price is $112.88, while its potential upside is 1.72%. Based on the analysts view we can conclude, New Relic Inc. is looking more favorable than Microsoft Corporation.

Institutional and Insider Ownership

Institutional investors held 79.8% of New Relic Inc. shares and 74.6% of Microsoft Corporation shares. Insiders held roughly 0.8% of New Relic Inc.’s shares. Comparatively, Microsoft Corporation has 0.1% of it’s share held by insiders.

Performance

In this table we show the Weekly, Monthly, Quarterly, Half Yearly, Yearly and YTD Performance of both pretenders.

	Performance (W)	Performance (M)	Performance (Q)	Performance (HY)	Performance (Y)	Performance (YTD)
New Relic Inc.	-2.01%	-11.1%	-19.11%	-18.71%	50.37%	47.9%
Microsoft Corporation	-2.98%	-3.9%	-1.64%	6.47%	30.43%	25.78%

For the past year New Relic Inc.’s stock price has bigger growth than Microsoft Corporation.

Summary

On 9 of the 14 factors Microsoft Corporation beats New Relic Inc.

Microsoft Corporation develops, licenses, and supports software products, services, and devices worldwide. The companyÂ’s Productivity and Business Processes segment offers Office 365 commercial products and services for businesses, including Office, Exchange, SharePoint, Skype for Business, and related Client Access Licenses (CALs); Office 365 consumer services, such as Skype, Outlook.com, and OneDrive; Dynamics business solutions, such as financial management, enterprise resource planning, customer relationship management, supply chain management, and analytics applications for small and mid-size businesses, large organizations, and divisions of enterprises; and LinkedIn online professional network. Its Intelligent Cloud segment licenses server products and cloud services, such as Microsoft SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as well as Azure, a cloud platform with computing, networking, storage, database, and management services; and enterprise services, such as Premier Support and Microsoft Consulting that assist in developing, deploying, and managing Microsoft server and desktop solutions, as well as provide training and certification to developers and IT professionals on Microsoft products. The companyÂ’s More Personal Computing segment comprises Windows OEM, volume, and other non-volume licensing of the Windows operating system; patent licensing, Windows Internet of Things, MSN display advertising, and Windows Phone licensing system; devices, including Microsoft Surface, phones, and PC accessories; and search advertising, including Bing and Bing Ads. This segment also provides gaming platforms, including Xbox hardware, Xbox Live, video games, and third-party video games. The company markets and distributes its products through original equipment manufacturers, distributors, and resellers, as well as through online and Microsoft retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.