Great Elm Capital Group (NASDAQ: GEC) and New Relic (NYSE:NEWR) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Earnings and Valuation

This table compares Great Elm Capital Group and New Relic’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Great Elm Capital Group $2.86 million 29.59 -$6.89 million $3.21 1.14
New Relic $284.97 million 9.31 -$46.54 million ($1.13) -43.07

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

Insider & Institutional Ownership

41.2% of Great Elm Capital Group shares are held by institutional investors. Comparatively, 74.8% of New Relic shares are held by institutional investors. 5.0% of Great Elm Capital Group shares are held by insiders. Comparatively, 23.1% of New Relic shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Great Elm Capital Group and New Relic’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Great Elm Capital Group N/A -33.33% -21.03%
New Relic -20.68% -29.19% -16.58%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Great Elm Capital Group and New Relic, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Great Elm Capital Group 0 0 0 0 N/A
New Relic 0 2 10 0 2.83

New Relic has a consensus target price of $49.90, indicating a potential upside of 2.53%. Given New Relic’s higher possible upside, analysts clearly believe New Relic is more favorable than Great Elm Capital Group.

Summary

New Relic beats Great Elm Capital Group on 7 of the 11 factors compared between the two stocks.

About Great Elm Capital Group

Great Elm Capital Group, Inc., formerly Unwired Planet, Inc., is a holding company. The Company makes investments in businesses and assets in various industries. The Company’s investment for long-term value creation is in the asset management business. The Company continues to explore other opportunities in the investment management business, including other business development companies (BDCs) that trade at a discount to their net asset value. The Company intends to build a diversified investment company consisting of the following three business lines: investment management, financial products and merchant banking. It is embarking on a program of creating bespoke financial products and creating a pipeline of acquisition opportunities. The Company’s subsidiary is Great Elm Capital Corporation (GECC).

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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