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AppFolio (APPF)
NASDAQ:APPF
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AppFolio
(NASDAQ:APPF)72Outperform
Positive Factors
Financial Performance
AppFolio has outperformed the Nasdaq, attributed to its strong execution in driving share gains, expanding ARPU, and meaningfully improving margins.
Negative Factors
Growth Expectations
AppFolio's 2025 is seen as a transitional year with tough comparisons and leadership changes, leading to lower growth expectations.
Leadership Changes
Recent leadership changes, including a new CRO and ongoing CFO search, create some near-term execution risk for AppFolio.
AppFolio (APPF) vs. S&P 500 (SPY)
Market Cap
$8.04B
Dividend YieldN/A
Average Volume (3M)343.66K
Price to Earnings (P/E)39.8
Beta (1Y)1.41
Revenue Growth28.01%
EPS Growth8699.84%
CountryUS
Employees1,634
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)5.55
Shares Outstanding23,241,750
10 Day Avg. Volume348,811
30 Day Avg. Volume343,659
Financial Highlights & Ratios
PEG Ratio0.00457
Price to Book (P/B)N/A
Price to Sales (P/S)10.13
Price to Cash Flow (P/CF)55.00
P/FCF Ratio55.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$237.50Price Target Upside7.52% Upside
Rating ConsensusHold
Number of Analyst Covering4
AppFolio Business Overview & Revenue Model
Company DescriptionAppFolio, Inc. is a leading provider of cloud-based software solutions, primarily serving small and medium-sized businesses in the property management and legal industries. The company's core offerings include comprehensive property management software that streamlines operations for property managers, and legal practice management software designed to enhance the efficiency of law firms. AppFolio's platforms are designed to provide an intuitive user experience and integrate various functionalities, such as accounting, marketing, and communication, to support the operational needs of its clients.
How the Company Makes MoneyAppFolio generates revenue primarily through a subscription-based model. Clients pay recurring fees to access the company's cloud-based software solutions. The revenue streams are largely driven by the property management software, which charges fees based on the number of units managed through the platform. Additionally, AppFolio supplements its subscription revenue with value-added services, such as electronic payment processing, tenant screening, and insurance offerings, providing additional layers of convenience and functionality for users. The company also earns from its legal practice management software, which operates on a similar subscription basis. AppFolio's growth is supported by its focus on delivering innovative solutions and maintaining strong customer relationships, which contribute to high customer retention rates and the potential for upselling additional services.
AppFolio Financial Statement Overview
Summary
AppFolio demonstrates solid financial health with a robust income statement, low leverage on the balance sheet, and strong cash flow generation. The company exhibits significant revenue growth and profitability, supported by effective cost management and operational efficiency.Income Statement
AppFolio shows a robust financial performance with a high gross profit margin of 50.56% and a net profit margin of 34.54% for the TTM (Trailing-Twelve-Months). The company also achieved a significant revenue growth rate of 25.14% from 2022 to 2023. Strong EBIT and EBITDA margins at 22.97% and 26.38%, respectively, indicate effective cost management and operational efficiency.85
Very Positive
Balance Sheet
The balance sheet reflects strong equity with a low debt-to-equity ratio of 0.07, showcasing a conservative leverage position. Return on equity (ROE) for the TTM is impressive at 39.29%. The equity ratio stands at 82.87%, indicating a solid equity base. However, the relatively high cash and cash equivalents suggest underutilization of resources.78
Positive
Cash Flow
AppFolio's cash flow statement reveals solid free cash flow growth, with a substantial operating cash flow to net income ratio of 0.92 for the TTM, indicating efficient cash conversion. The free cash flow to net income ratio is at 0.89, suggesting strong cash generation relative to net income. Stable cash flow management supports ongoing operational and strategic initiatives.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 794.20M | 620.45M | 471.88M | 359.37M | 310.06M | Gross Profit |
| 492.59M | 382.37M | 280.06M | 215.43M | 191.03M | EBIT |
| 135.64M | 963.00K | -72.37M | -11.88M | 9.78M | EBITDA |
| 169.87M | 29.95M | -38.36M | 20.35M | 17.39M | Net Income Common Stockholders |
| 204.07M | 2.70M | -68.12M | 1.03M | 158.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 278.25M | 211.71M | 160.07M | 122.45M | 168.52M | Total Assets |
| 626.68M | 408.89M | 381.22M | 408.02M | 389.48M | Total Debt |
| 37.48M | 44.74M | 50.24M | 55.73M | 40.15M | Net Debt |
| -5.03M | -4.77M | -20.53M | -2.11M | -100.12M | Total Liabilities |
| 107.39M | 111.58M | 115.67M | 110.64M | 103.56M | Stockholders Equity |
| 519.29M | 297.31M | 265.55M | 297.38M | 285.92M |
| Cash Flow | Free Cash Flow | |||
| 186.14M | 51.24M | 4.14M | 2.67M | 3.22M | Operating Cash Flow |
| 188.16M | 60.28M | 25.36M | 35.39M | 48.30M | Investing Cash Flow |
| -151.76M | -55.58M | -6.47M | -110.46M | 146.51M | Financing Cash Flow |
| -43.40M | -25.96M | -6.16M | -7.35M | -70.36M |
AppFolio Technical Analysis
Neutral
220.89
Price Trends
235.57
Negative
234.54
Negative
233.96
Negative
Market Momentum
-4.63
Negative
47.26
Neutral
77.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APPF, the sentiment is Neutral. The current price of 220.89 is above the 20-day moving average (MA) of 216.43, below the 50-day MA of 235.57, and below the 200-day MA of 233.96, indicating a neutral trend. The MACD of -4.63 indicates Negative momentum. The RSI at 47.26 is Neutral, neither overbought nor oversold. The STOCH value of 77.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for APPF.
AppFolio Risk Analysis
AppFolio disclosed 43 risk factors in its most recent earnings report. AppFolio reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AppFolio Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $33.39B | 7,461.66 | 0.29% | ― | 21.07% | ― | |
72 Outperform | $8.04B | 39.78 | 49.98% | ― | 28.01% | 8699.84% | |
67 Neutral | $3.07B | 21.96 | 45.56% | ― | 10.74% | 200.08% | |
66 Neutral | $62.58B | ― | -32.59% | ― | 23.19% | 11.01% | |
66 Neutral | $2.73B | 26.10 | 3.83% | ― | 8.31% | -49.90% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
APPF
AppFolio
220.89
-6.87
-3.02%
HUBS
HubSpot
640.21
27.71
4.52%
TEAM
Atlassian
238.86
23.23
10.77%
BL
BlackLine
48.88
-18.26
-27.20%
REZI
Resideo Technologies
18.43
-4.32
-18.99%
AppFolio Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -12.89% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The call highlighted significant revenue growth, improved operating margins, and successful strategic initiatives, particularly in AI and customer growth. However, challenges such as increased operating expenses and the impact of high interest rates on customer portfolio expansion were noted.Highlights
Strong Revenue Growth
Fourth quarter revenue grew 19% year-over-year to $204 million, with a 28% annual increase to $794 million.
Operating Margin Improvement
Non-GAAP operating margin more than doubled from 12% to 25% for the full year.
Customer and Unit Growth
Managed approximately 8.7 million units from 20,784 customers, a 6% increase in units and a 5% increase in customers year-over-year.
Introduction of AI Innovations
Launched Realm-X AI-powered capabilities, with over 1 million actions completed and rapid adoption compared to legacy workflows.
Recognition and Awards
Recognized by Forbes on lists for America's Best Companies and Most Trusted Companies in America for 2025.
Successful Acquisition
Acquired LiveEasy to enhance the resident experience, which is progressing well and expected to drive significant value.
Lowlights
Increased Operating Expenses
Sales and marketing, R&D, and G&A expenses grew to 41% of revenue from 37% in the previous year.
Impact of High Interest Rates
High interest rate environment expected to limit current customers' ability to expand their portfolios.
Company Guidance
During AppFolio's Fourth Quarter 2024 Financial Results Conference Call, significant guidance was provided for the upcoming fiscal year. The company anticipates 2025 annual revenue to range between $920 million and $940 million, indicating a 17% growth rate at the midpoint. Non-GAAP operating margin is expected to be between 24.5% and 26.5%, with diluted weighted average shares outstanding projected to be approximately 37 million. AppFolio plans to continue expanding its customer base and units under management, while also increasing average revenue per user (ARPU) through greater adoption of its Plus and Max plans and value-added services. Despite the challenging high-interest rate environment, the company remains optimistic about its growth prospects, particularly in its resident segment, and plans to maintain operational efficiency by ensuring headcount growth remains below revenue growth.AppFolio Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
AppFolio Reports Strong Revenue Growth and Leadership Change
Positive
Jan 30, 2025
On January 29, 2025, AppFolio’s Board of Directors appointed Tim Eaton as the interim Principal Accounting Officer. Eaton has been with the company since 2020, holding various leadership roles, and his prior experience includes positions at Visa, Google, and Goldman Sachs. Separately, AppFolio announced its financial results for the fourth quarter and fiscal year ending December 31, 2024, reporting a 19% revenue increase to $204 million for the quarter and a 28% increase to $794 million for the fiscal year. The results highlight the company’s significant growth and continued investment in AI and customer experience to drive business outcomes.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.