AppFolio is the IBD Stock of the Day as the real estate software firm breaks out in high volume, moving into a buy zone. Aside from AppFolio stock, other real estate sector firms gained on Friday amid expectations interest rates could fall.
Asked about Friday's pop in AppFolio stock, Stephens analyst John Campbell said in an email: "I think it's up along with a lot of the interest rate-exposed/sensitive stocks. My other more directly exposed names in my coverage universe are up big as well — Porch Group, LendingTree, Redfin and Opendoor Technologies. The HGX (housing index) is also up. AppFolio doesn't have much direct exposure to transactions. But think some view the improved rate outlook as a positive sign for the broader multifamily vertical."
On the stock market today, AppFolio stock rose 5% to close at 264.35. APPF stock has shot up 51% in 2024.
AppFolio is scheduled to report second quarter earnings on July 25. Investors may want to be cautious ahead of the report.
One strategy around earnings would be to use call options. That approach would let investors cap their possible loss while still letting them participate in any post-earnings upside.
For the June quarter, analysts estimate that adjusted profit will surge 317% to 96 cents per share. Revenue will climb 30% to $191 million, analysts estimate.
AppFolio Stock Entry Point
From a technical view, AppFolio stock has a 256.73 buy point from a flat base.
In early 2023, AppFolio promoted Shane Trigg, a former Salesforce executive, to become the company's chief executive. Before being named CEO, Trigg had served as AppFolio's general manager of real estate.
In 2023, the Santa Barbara, Calif.-based company cut jobs to improve profitability. Also, the company started charging customers banking transaction fees for rent payments made through the AppFolio platform.
Founded in 2006, AppFolio went public in 2015 with an initial public offering that raised $86 million.
Further, AppFolio's cloud-based property management platform includes an artificial intelligence leasing assistant. It features tenant screening, electronic payment, utility management, maintenance contact center and tenant debt collection.
AppFolio focuses on residential property management. It has some 19,000 property management customers. As of March 31, total units on the AppFolio property manager platform were 8.3 million, up nearly 11% from a year earlier.
AppFolio Expands Into New Markets
AppFolio competes with property management software providers Yardi, RealPage, MRI Software and Entrata. Private-equity firm Thoma Bravo LP acquired RealPage for $9.6 billion in 2021.
"With respect to the competitive landscape with upstart Bilt, we believe AppFolio management has multiple options to bring a rewards solution to market," said D.A. Davidson analyst Gil Luria in a report. "We do not believe Bilt has won any payments business from AppFolio's customer base."
"With a leading position in small-and-medium sized businesses, the company has been gaining share with larger property managers," said Jason Celino, analyst at KeyBanc Capital Markets, in a report. "The company is also expanding into real estate investment management and other property types such as short-term rentals and affordable housing."
The company's relative strength line is near all-time highs.
AppFolio Stock: Technical Ratings
Meanwhile, AppFolio stock holds an IBD Composite Rating of 99, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. Also, the best growth stocks have a Composite Rating of 90 or better.
Further, AppFolio stock has an Accumulation/Distribution Rating of B-minus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
The rating, on a scale of A+ to E, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
