UBS analyst Seth Gilbert CFA has reiterated their bullish stance on APPF stock, giving a Buy rating today.
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Seth Gilbert CFA has given his Buy rating due to a combination of factors that highlight AppFolio’s solid long‑term outlook despite near‑term volatility. He notes that the company’s fourth-quarter revenue, operating margin, and free cash flow all surpassed his expectations, even after adjusting for a one-time milestone payment from a marketplace partner. Management’s 2026 revenue guidance aligns broadly with market forecasts, while their operating margin outlook is meaningfully higher than both his prior estimate and consensus, reflecting improving profitability. Gilbert also emphasizes that unit growth in value-added services remains robust, and that onboarding larger, upmarket customers should translate into stronger monetization over time as these clients ramp usage.
At the same time, Gilbert acknowledges the market’s negative reaction, with the stock trading down notably on a miss in core revenue and broader software multiple compression. In response, he makes only a minor downward adjustment to his 2026 revenue forecast while raising his operating margin estimate, indicating increased confidence in the earnings power of the business. He highlights AppFolio’s efforts to enhance efficiency through AI and offshoring while still investing in innovation and sales capacity, supporting sustained margin expansion. Given these fundamentals and a valuation he derives from a mid-to-upper range peer free cash flow multiple, Gilbert concludes that the pullback in the share price offers an attractive entry point, justifying the reaffirmation of his Buy rating.
In another report released today, KeyBanc also maintained a Buy rating on the stock with a $255.00 price target.