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AppFolio Inc. (APPF)
:APPF

AppFolio (APPF) AI Stock Analysis

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AppFolio

(NASDAQ:APPF)

Rating:77Outperform
Price Target:
$248.00
▲(6.60%Upside)
AppFolio's overall score reflects its strong financial performance and positive earnings call sentiment, which are slightly offset by its valuation concerns and mixed technical indicators. The company's strategic initiatives and growth prospects in the software application industry support a favorable outlook.
Positive Factors
Financial Performance
AppFolio has outperformed the Nasdaq, attributed to its strong execution in driving share gains, expanding ARPU, and meaningfully improving margins.
Product Adoption
Management said demand for AppFolio’s AI solutions within Realm-X have continued to push customers to upgrade to higher APM tiers.
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.
Market Conditions
Elevated interest rate environment limits upside potential to unit growth, with interest rates needing to fall to drive better organic property unit expansion.

AppFolio (APPF) vs. SPDR S&P 500 ETF (SPY)

AppFolio Business Overview & Revenue Model

Company DescriptionAppFolio, Inc., together with its subsidiaries, provides cloud business management solutions for the real estate industry. The company offers AppFolio Property Manager, a platform to leverage process automation, easy to use interface, and the optimization of common workflows for property management companies, as well as completes and records critical transactions in the system and give its customers access to the data they need to run their business; AppFolio Property Manager Plus, which offers customizable workflows that allow customers to digitize their existing processes, performance insights, intelligent revenue management, and integrations through selected partners and dedicated strategic account managers; and AppFolio Investment Management, a solution that is designed to enable real estate investment management organizations to manage investor relationships through enhancing transparency and streamlining certain business processes. It also provides value added services that are designed to enhance, automate, and streamline processes and workflows for property management businesses, such as electronic payment, tenant screening, and insurance services. AppFolio, Inc. was incorporated in 2006 and is headquartered in Santa Barbara, California.
How the Company Makes MoneyAppFolio generates revenue primarily through a subscription-based model, where customers pay recurring fees to access its software solutions. The company's key revenue streams include software subscription fees, value-added services, and implementation services. AppFolio also benefits from additional revenue through partnerships with third-party service providers that integrate with its platform, offering enhanced functionalities such as payment processing and insurance services. The company's focus on innovation and customer-centric solutions supports its growth and ability to maintain a competitive edge in the property management software market.

AppFolio Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: -0.85%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call presented a predominantly positive outlook with robust revenue growth, strategic partnerships, and expansion of AI capabilities, although there were some concerns about decreased operating margins and increased cost of revenue.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Revenue grew 16% year over year to $218 million in the first quarter, driven by increased customer value in ARPU, growth in new customer units, and increased adoption of services.
Strategic Partnerships and Innovations
Announced a strategic partnership with Second Nature and the addition of Zillow to the AppFolio Stack Partner ecosystem, enhancing the resident experience and streamlining processes for property managers.
Expansion of AI Capabilities
89% of new customers are using AI-powered AppFolio Rev X capabilities, resulting in a 73% higher lead-to-showing conversion rate and 9.7 hours saved weekly on reporting tasks.
Strong Customer and Unit Growth
Managed approximately 8.8 million units from 21,105 customers, a 6% increase in both units and customers year over year.
Successful Stock Repurchase Program
Completed a $100 million stock repurchase program and approved a new $300 million repurchase program.
Negative Updates
Decreased Operating Margin and Cash Flow
Non-GAAP operating margin decreased from 25.7% to 24.3%, and net cash provided by operating activities decreased from 22.9% to 17.7% compared to the first quarter last year.
Increased Cost of Revenue
Cost of revenue increased to 36% from 34% last year, primarily due to reduction in fees associated with certain card-based transactions and increased adoption of credit cards for payments.
Company Guidance
During AppFolio's first quarter 2025 financial results conference call, the company reported a 16% year-over-year revenue increase to $218 million. They also highlighted a GAAP operating margin of 24% and net cash provided by operating activities at 18%. The company managed approximately 8.8 million units from 21,105 customers, marking a 6% increase in both units and customers compared to the previous year. Revenue from core solutions rose by 15% to $49.5 million, while value-added services increased by 16% to $165 million. AppFolio's guidance for 2025 projects annual revenue between $920 million and $940 million, with a non-GAAP operating margin expected to be between 24.5% and 26.5%. The call also announced a new $300 million stock repurchase program and a $75 million minority equity interest in Second Nature to enhance resident experience, reflecting the company's strategy to drive innovation and customer value.

AppFolio Financial Statement Overview

Summary
AppFolio exhibits strong financial performance with robust revenue and profit growth, efficient cost management, and low leverage. The company has demonstrated significant improvement in margins and cash flow generation, reflecting a positive trajectory in financial health. However, maintaining asset growth will be crucial to support future expansion.
Income Statement
85
Very Positive
AppFolio has demonstrated strong revenue growth with a TTM increase to $824.47M, reflecting a significant rise from prior years. The gross profit margin stands at 62.8%, showcasing excellent cost management. The net profit margin is robust at 23.9%, indicating effective operational strategies leading to profitability. The company has improved its EBIT and EBITDA margins, currently at 16.4% and 19.9% respectively, indicating strong operational efficiency. Overall, the income statement reflects a positive growth trajectory and profitability improvement.
Balance Sheet
78
Positive
The balance sheet of AppFolio reveals a strong equity position with a debt-to-equity ratio of 0.08, indicating low leverage and financial stability. The equity ratio is high at 81.9%, suggesting a solid asset base funded by equity. Return on equity is impressive at 42.6%, highlighting effective use of shareholders' funds. However, the decrease in total assets and equity over the recent periods could pose a potential risk if not addressed.
Cash Flow
80
Positive
AppFolio's cash flow statement shows a strong operating cash flow to net income ratio of 0.93, indicating good cash generation relative to its net income. Free cash flow has grown consistently, with a TTM free cash flow of $179.86M, demonstrating the company's ability to generate cash after capital expenditures. The free cash flow to net income ratio is high at 0.91, supporting the company's sustainable cash flow generation. Overall, cash flows are stable and supportive of ongoing operations and potential growth investments.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue824.47M794.20M620.45M471.88M359.37M310.06M
Gross Profit517.55M492.59M382.37M280.06M215.43M191.03M
EBITDA161.22M169.87M29.95M-38.36M20.35M17.39M
Net Income196.79M204.07M2.70M-68.12M1.03M158.40M
Balance Sheet
Total Assets564.73M626.68M408.89M381.22M408.02M389.48M
Cash, Cash Equivalents and Short-Term Investments210.81M278.25M211.71M160.07M122.45M168.52M
Total Debt40.70M41.75M44.74M50.24M55.73M40.15M
Total Liabilities102.61M107.39M111.58M115.67M110.64M103.56M
Stockholders Equity462.12M519.29M297.31M265.55M297.38M285.92M
Cash Flow
Free Cash Flow179.86M186.14M51.24M4.14M2.67M3.22M
Operating Cash Flow183.67M188.16M60.28M25.36M35.39M48.30M
Investing Cash Flow-47.93M-151.76M-55.58M-6.47M-110.46M146.51M
Financing Cash Flow-138.02M-43.40M-25.96M-6.16M-7.35M-70.36M

AppFolio Technical Analysis

Technical Analysis Sentiment
Positive
Last Price232.65
Price Trends
50DMA
217.82
Positive
100DMA
217.89
Positive
200DMA
227.58
Positive
Market Momentum
MACD
3.91
Negative
RSI
61.28
Neutral
STOCH
72.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APPF, the sentiment is Positive. The current price of 232.65 is above the 20-day moving average (MA) of 225.72, above the 50-day MA of 217.82, and above the 200-day MA of 227.58, indicating a bullish trend. The MACD of 3.91 indicates Negative momentum. The RSI at 61.28 is Neutral, neither overbought nor oversold. The STOCH value of 72.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$6.17B13.0758.14%23.21%
77
Outperform
$8.38B43.4549.11%22.73%154.79%
UU
68
Neutral
$10.09B-14.15%-16.74%49.75%
DBDBX
64
Neutral
$7.76B18.10-60.11%0.79%0.59%
64
Neutral
$8.71B-34.18%24.11%21.87%
63
Neutral
$33.61B6.06-11.53%1.82%5.53%-18.79%
61
Neutral
$7.46B452.762.53%29.31%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
APPF
AppFolio
235.49
-17.09
-6.77%
DBX
Dropbox
27.55
5.22
23.38%
U
Unity Software
26.13
10.42
66.33%
CFLT
Confluent
25.60
-3.71
-12.66%
CWAN
Clearwater Analytics Holdings
21.77
2.75
14.46%
GTLB
Gitlab
45.14
-7.44
-14.15%

AppFolio Corporate Events

Executive/Board ChangesShareholder Meetings
AppFolio Holds 2025 Annual Stockholders Meeting
Neutral
Jun 17, 2025

AppFolio, Inc. held its 2025 Annual Meeting of Stockholders on June 13, 2025, where several key proposals were voted upon. The meeting saw the election of three Class I directors, the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm, approval of executive compensation, and a decision to hold annual advisory votes on executive compensation.

The most recent analyst rating on (APPF) stock is a Buy with a $295.00 price target. To see the full list of analyst forecasts on AppFolio stock, see the APPF Stock Forecast page.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
AppFolio Announces $300M Stock Repurchase Program
Positive
Apr 24, 2025

On April 24, 2025, AppFolio announced a new $300 million stock repurchase program for its Class A common stock, replacing a previous $100 million program. The company also reported strong financial results for the first quarter of 2025, with a 16% year-over-year revenue growth to $218 million and strategic partnerships enhancing its resident strategy, positioning it well for future growth.

Executive/Board Changes
AppFolio Expands Board with New Independent Director
Positive
Apr 9, 2025

On April 3, 2025, AppFolio‘s Board of Directors expanded from eight to nine members, appointing Robert Donald Casey III as a new independent director. Mr. Casey, with extensive experience in technology and investment, is expected to enhance the company’s strategic direction and governance.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 04, 2025