Perion Network (NASDAQ: MAIL) and New Relic (NYSE:NEWR) are both application software companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Perion Network and New Relic, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Perion Network 0 0 0 0 N/A
New Relic 0 2 11 0 2.85

New Relic has a consensus target price of $51.64, indicating a potential downside of 0.51%. Given New Relic’s higher possible upside, analysts clearly believe New Relic is more favorable than Perion Network.

Risk and Volatility

Perion Network has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500. Comparatively, New Relic has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Institutional & Insider Ownership

73.5% of New Relic shares are owned by institutional investors. 23.1% of New Relic shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Perion Network and New Relic’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Perion Network N/A N/A N/A ($0.45) -2.36
New Relic $263.48 million 10.74 -$61.07 million ($1.13) -45.93

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

Profitability

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

Net Margins Return on Equity Return on Assets
Perion Network -51.68% -76.28% -44.81%
New Relic -20.68% -29.19% -16.58%

Summary

New Relic beats Perion Network on 8 of the 10 factors compared between the two stocks.

About Perion Network

Perion Network Ltd. is a global technology company. It is engaged in delivering advertising solutions to brands and publishers. It operates through High Impact Advertising solutions segment. It provides execution, ranging from high-impact advertisement formats to branded search, and a unified social and mobile programmatic platform. Its business solutions include Undertone, Codefuel, Growmobile, IncrediMail and Smilebox. Undertone offers engaging digital advertising, which is designed to capture consumer attention and drive engagement, delivering these advertisements across a portfolio of Websites and mobile applications. CodeFuel is an engagement and monetization suite delivering solutions for both content publishers and advertisers. Growmobile offers automated marketing solutions ranging from social advertising to user engagement. IncrediMail is a unified messaging application. Smilebox is a photo sharing and social expression product and offers various formats, themes and styles.

About New Relic

New Relic, Inc. (New Relic) is a provider of enterprise software. The Company’s cloud-based platform and range of products enable organizations to collect, store and analyze software data in real time. The Company’s New Relic Software Analytics Cloud consists of an integrated suite of products, a data database and an open platform. New Relic offers an integrated suite of products, namely, New Relic APM, for application performance management; New Relic Mobile, for mobile application performance management; New Relic Servers, for server monitoring for cloud and data centers; New Relic Browser, for end user experience monitoring and performance monitoring; New Relic Synthetics, for software testing through simulated usage; New Relic Plugins, plugins to extend its functionality into other applications; New Relic Alerts, for policy management and delivering alerts across entire suite of products, and New Relic Insights, for real-time big data analytics for business managers.

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