New Relic is a platform for applications monitoring. Its share are traded 60% below their peaks in 2021. Services of this company allows IT-departments to discover security issues and anomalies in the working process.

The company has launched New Relic One update that became a new growth driver. This update simplifies all company’s services in three categories. The subscription model and grace testing period were introduced. New option CodeStream introduced in early 2022 allowed users to roll back to the moment when the problem occurred and research in detail what was in the beginning of the bug.

New Relic revenue added 19% year-on-year to $205.8 million in the fourth financial quarter that ended March 31. Net revenue rate was recorded at 119% against 1165 in the previous quarter. This means that users spend by 19% more than in the same period a year before. Such indication reflect the benefit of the subscription model the company has introduced recently. Net cash flow was twice that a year before, at $44.1 million, while Enterprise Value (EV) rose to $2.7 billion. The company expects $930 million in revenues in 2022, bringing EV to Sales (EV/S) ratio to 2.9, which is very attractive for the software firm.

The mid-term target price is at $59 per share.