Down More Than 40% in the Past Year, Is This Growth SaaS Stock a Buy?

Though New Relic (NYSE: NEWR) delivered fiscal first-quarter results that beat its guidance last week, its stock price plunged 24% the following day. The market, it seems, is skeptical about the company's new strategy to boost long-term revenue growth. Yet the software-as-a-service (SaaS) monitoring and observability specialist remains exposed to the secular growth of its market. Given that, investors may wonder if this steep pullback -- the stock is down about 40% since Aug. 1 last year -- has created a good opportunity for them to buy into a growth stock at a reasonable price.

New Relic's software collects, stores, and analyzes data from cloud applications and infrastructure to monitor performance and troubleshoot issues. Management estimates that the company's total addressable market is $21 billion -- a vast opportunity.

After several quarters of underwhelming results, the company last year launched its latest product, New Relic One, to group its various capabilities into one programmable and integrated platform aimed at accelerating its growth.

Source Fool.com