Financial Review: New Relic (NEWR) versus Cornerstone OnDemand (CSOD)

New Relic (NYSE:NEWR) and Cornerstone OnDemand (NASDAQ:CSOD) are both mid-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Analyst Recommendations

This is a breakdown of recent recommendations for New Relic and Cornerstone OnDemand, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Relic 0 3 11 1 2.87
Cornerstone OnDemand 1 2 7 1 2.73

New Relic currently has a consensus target price of $114.33, indicating a potential upside of 15.09%. Cornerstone OnDemand has a consensus target price of $61.55, indicating a potential upside of 13.22%. Given New Relic’s stronger consensus rating and higher possible upside, equities research analysts plainly believe New Relic is more favorable than Cornerstone OnDemand.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Relic $355.06 million 16.05 -$45.32 million ($0.74) -134.24
Cornerstone OnDemand $537.89 million 5.97 -$33.84 million ($0.23) -236.35

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

Volatility & Risk

New Relic has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Cornerstone OnDemand has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
New Relic -6.96% -6.08% -2.13%
Cornerstone OnDemand -6.29% -28.62% -1.58%

Insider & Institutional Ownership

81.3% of New Relic shares are owned by institutional investors. Comparatively, 93.2% of Cornerstone OnDemand shares are owned by institutional investors. 20.4% of New Relic shares are owned by insiders. Comparatively, 11.7% of Cornerstone OnDemand shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

New Relic Company Profile

New Relic, Inc., a software-as-a-service company, provides various digital products worldwide. Its cloud-based platform and suite of products include New Relic Platform, which enable organizations to collect, store, and analyze data. The company offers New Relic Application Performance Management that provides visibility into the performance and usage of server-based applications, such as data pertaining to response time, transaction throughput, error rates, top transactions, and user satisfaction; New Relic Mobile, which provides code-level visibility into the performance and health of mobile applications running on the iOS and Android mobile operating systems; and New Relic Browser that monitors the page view experiences of actual end-users for desktop and mobile browser-based applications. It also provides New Relic Synthetics, which simulates usage and reproduces business-critical functionality that enables its users to test their software throughout the entire development life cycle; New Relic Infrastructure that provides a view of the health and configuration changes for an enterprise's entire host ecosystem across various environments; and New Relic Insights that enables technology and business users to perform real-time analysis. In addition, the company offers New Relic Applied Intelligence platform; New Relic's alerting platform, a centralized notification system that delivers alerts from across the products that make up the New Relic Platform; and New Relic's plugins architecture, 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. 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.

Cornerstone OnDemand Company Profile

Cornerstone OnDemand, Inc., together with its subsidiaries, provides learning and human capital management software through software-as-a-service model worldwide. Its enterprise human capital management platform comprises four product suites, such as Recruiting Suite that helps organizations to attract, hire, and onboard the right employees; Learning Suite, which provides robust, a modern learning management software to supports compliance, knowledge sharing, and employee-driven development training; Performance Suite that provides tools to manage goal setting, performance reviews, competency assessments, development plans, continuous feedback, compensation management, and succession planning; and HR Administration Suite, which provides an aggregated view of all employee data with workforce planning, self-service management, and compliance reporting capabilities. The company also offers professional services, including application configuration, system integration, business process re-engineering, change management, and training. It serves business services, financial services, healthcare, pharmaceuticals, insurance, manufacturing, retail, and technology industries. Cornerstone OnDemand, Inc. was founded in 1999 and is headquartered in Santa Monica, California.

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