- NewRelic is one of a small but important collection of software companies in the application performance management segment.
- This segment is growing in importance to enterprise customers, as enterprise IT environments become more complex and fragmented.
- The segment is oligopolistic in nature, meaning high levels of pricing power and high margins for the leading players.
- NewRelic has a stable and cash generative installed base, but has struggled with growth of late. The stock has sold off and is priced attractively for a buyout.
For further details see:
We're At Speculative Buy On New Relic, A Potential Acquisition Target