Exploring New Relic, Inc. (NEWR) Investor Profile: Who’s Buying and Why?

Who Invests in New Relic, Inc. (NEWR) and Why?

Who Invests in New Relic, Inc. (NEWR) and Why?

Key Investor Types

Investors in New Relic, Inc. can be broadly categorized into three main types: retail investors, institutional investors, and hedge funds.

• Retail Investors: Individual investors who buy and sell stocks for their personal accounts. As of Q2 2024, retail investors accounted for approximately 25% of the total trading volume in NEWR.
• Institutional Investors: Entities such as mutual funds, pension funds, and insurance companies that invest large sums of money. Institutional ownership of NEWR stands at 78% of the total shares outstanding.
• Hedge Funds: Investment funds that employ various strategies to earn active returns. Hedge fund ownership of NEWR is around 10% as of recent filings.

Investment Motivations

Different types of investors are attracted to New Relic for various reasons:

• Growth Prospects: The company reported a year-over-year revenue growth of 7% for Q2 2024, with total revenue reaching $242.8 million.
• Market Position: New Relic's transition to a consumption-based revenue model has enhanced its competitive position, making it attractive for long-term investors.
• Innovation and Development: Continuous investment in research and development, totaling $69.4 million in Q2 2024, appeals to growth-focused investors.

Investment Strategies

Investors in New Relic typically employ several strategies:

• Long-Term Holding: Institutional investors often adopt a long-term perspective, holding shares to benefit from New Relic’s growth trajectory.
• Short-Term Trading: Retail investors may engage in short-term trading to capitalize on stock price fluctuations, especially during earnings announcements or major product releases.
• Value Investing: Some investors look for undervalued stocks in the tech sector, especially given New Relic's current net loss of $23.8 million for Q2 2024, as they believe the stock has potential for recovery.

Investor Sentiment and Trends

Investor sentiment around New Relic is influenced by various factors:

• Net Revenue Retention Rate: New Relic's net revenue retention rate of 114% indicates strong customer loyalty and expansion potential.
• Large Customer Accounts: The company has 1,255 active customer accounts generating more than $100,000 in revenue, representing 84% of total revenue.
• International Expansion: New Relic aims to increase its international revenue, currently at 18% from EMEA, 12% from APAC, and 8% from other regions.

As of September 30, 2023, the company's accumulated deficit stood at $1,024.7 million, which reflects the ongoing investments in growth and restructuring.

Institutional Ownership and Major Shareholders of New Relic, Inc. (NEWR)

Institutional Ownership and Major Shareholders

As of September 30, 2023, the following are the top institutional investors in the company:

Recent changes in ownership show that institutional investors have made notable adjustments:

• Vanguard Group Inc. increased their stake by 1.2% in the last quarter.
• BlackRock Inc. decreased their holdings by 0.5%.
• Wellington Management Group LLP increased their stake by 0.9%.
• FMR LLC (Fidelity) decreased their holdings by 2.1%.
• State Street Corporation maintained their position without significant changes.

Institutional investors play a critical role in the company’s stock price and strategy. Their large stakes often influence:

• Market stability: Large institutional ownership can lead to reduced volatility in stock prices.
• Corporate governance: Institutions typically advocate for shareholder-friendly practices, which can affect strategic decisions.
• Liquidity: Higher institutional ownership often correlates with increased trading volume, impacting stock liquidity.

As of the last reporting period, the total shares outstanding were 71,284,000 with an accumulated deficit of $1,024.7 million. The net loss attributable to the company was $61.2 million for the six months ended September 30, 2023. The company continues to focus on its transition to a consumption-based revenue model, which is being closely monitored by these institutional investors as it could significantly impact future performance.

Key Investors and Their Influence on New Relic, Inc. (NEWR)

Key Investors and Their Impact on New Relic, Inc. (NEWR)

As of 2024, New Relic, Inc. has attracted a diverse group of investors, significantly impacting its strategic direction and stock performance. Below are notable investors and their influence.

Notable Investors

• Vanguard Group Inc. - One of the largest institutional investors, holding approximately 8.5% of total shares.
• BlackRock Inc. - Another major player with a stake of about 7.2%.
• Wellington Management Co. LLP - Holds roughly 5.6% of the shares.
• State Street Corporation - Owns about 4.9% of the company.
• Winton Group Ltd. - Recently increased its stake to approximately 3.0%.

Investor Influence

These investors play a crucial role in influencing company decisions. Large institutional investors like Vanguard and BlackRock often push for governance changes and strategic initiatives aimed at enhancing shareholder value. Their voting power can sway board elections and influence executive compensation packages. This influence is particularly evident in the company's shift towards a consumption-based revenue model, which aligns with investor interests in sustainable growth and profitability.

Recent Moves

Recent notable moves by investors include:

• Vanguard Group increased its holdings by 1.2 million shares in Q4 2023.
• BlackRock has adjusted its position, selling 500,000 shares but still maintaining a significant stake.
• Wellington Management acquired an additional 300,000 shares in early 2024, signaling confidence in the company's strategic direction.

Investors' strategic decisions, such as increasing or decreasing their stakes, can lead to fluctuations in stock prices and can impact the overall market sentiment surrounding the company. The ongoing engagement of these key investors is essential for New Relic as it navigates its transition to a consumption-based model and seeks to enhance its market position.

Market Impact and Investor Sentiment of New Relic, Inc. (NEWR)

Market Impact and Investor Sentiment

Investor Sentiment

As of 2024, the current sentiment among major shareholders toward the company is generally negative. This is reflected in the significant net losses reported and the restructuring initiatives undertaken to realign resources.

Recent Market Reactions

The stock market has responded to changes in ownership and large investor moves with volatility. Following the announcement of a restructuring plan, the company's stock price saw fluctuations, indicating investor uncertainty. For instance, the stock price experienced a decline of approximately 15% in the month following the restructuring announcement.

Analyst Perspectives

Analysts have expressed cautious views regarding the impact of key investors on the company's future. Insights suggest that while institutional investors hold a substantial portion of shares, their sentiment has shifted towards skepticism due to ongoing losses and restructuring efforts.

Furthermore, the net revenue retention rate has decreased to 114% as of September 30, 2023, down from 119% year-over-year. Analysts believe that the company's transition to a consumption-based model may take time to stabilize investor confidence and improve sentiment.