These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. For example, the New Relic, Inc. (NYSE:NEWR) share price is up 43% in the last 1 year, clearly besting the market return of around 7.9% (not including dividends). That's a solid performance by our standards! Looking back further, the stock price is 39% higher than it was three years ago.

Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

View our latest analysis for New Relic

Given that New Relic didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year New Relic saw its revenue grow by 16%. We respect that sort of growth, no doubt. Buyers pushed the share price 43% in response, which isn't unreasonable. If the company can maintain the revenue growth, the share price could go higher still. But it's crucial to check profitability and cash flow before forming a view on the future.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

New Relic is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling New Relic stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

It's good to see that New Relic has rewarded shareholders with a total shareholder return of 43% in the last twelve months. Notably the five-year annualised TSR loss of 1.0% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for New Relic you should be aware of.