Real estate software firm AppFolio is the IBD Stock of the Day in the wake of its first analyst day under a new chief executive. APPF stock has shot up 96% in 2023 and trades in a buy zone.
On the stock market today, AppFolio stock fell 5% to close at 200.36.
From a technical view, APPF stock owns a 201.91 buy point from a consolidation.
AppFolio promoted Shane Trigg, a former Salesforce executive, to become the company's chief executive on March 2. Prior to being named CEO, Trigg had served as AppFolio's general manager of real estate.
On Tuesday, AppFolio hosted an analyst day to update long-term financial goals.
"We come away from AppFolio's analyst day positive on its long-term growth strategy and margin expansion opportunities," Jason Celino, analyst aKeyBancnc Capital Markets, said in a report.
"Consistent with our positive preview, it announced a new pricing/packaging tier, Max, catered to large enterprise customers as it continues to move upmarket. Also Appfolio provided incremental messaging around ARPU (average revenue per user) expansion opportunities."
The company's relative strength line is near all-time highs.
APPF Stock: Technical Ratings
Meanwhile, AppFolio stock holds an IBD Composite Rating of 94, 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 A-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.
The Santa Barbara, Calif.-based company has been making job cuts to improve profitability.
In the September quarter, EPS rose 436% to 59 cents. That easily topped estimates for 15-cent profit using generally accepted accounting principles, or GAAP. A year earlier, the company reported a 12-cent loss.
AppFolio Stock: 2015 IPO
Founded in 2006, AppFolio went public in 2015 with an initial public offering that raised $86 million.
AppFolio focuses on residential property management. It has some 19,000 property management customers. In the June quarter, total units on the AppFolio property manager platform rose 13% from a year earlier to 7.7 million.
"AppFolio has been re-prioritizing its unit expansion strategy, focusing on adding residential units, and de-prioritizing community associations, as it pursues profitable growth," added Celino. "Along with Max, the Company is seeing good traction for its AI solution."
Third quarter sales rose 32% to $165.4 million.
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.
AI Leasing Assistant
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 also invested in AI tools more than five years ago, prior to the recent buzz over generative AI.
On July 31, it started charging customers banking transaction fees for rent payments made through the AppFolio platform. The company subsequently raised its 2023 revenue outlook by 3% to $595 million.
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