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AppFolio Inc.(NASDAQ: (APPF - Free Report) – Free Report), a Zacks Ranked #1 (Strong Buy), offers cloud-based software solutions for property management and legal industries. It offers AppFolio Property Manager, a solution for the property managers including activities of posting and tracking tenant vacancies, handling the entire leasing process electronically, administering maintenance and repairs with their vendor networks, managing accounting and reporting to property owners. MyCase solution for practitioners and small law firms, providing time tracking, billing and payments, client communication, coordination with other lawyers and support staff, legal document management and assembly and general office administration services. Value+ services include Websites and electronic payment services. AppFolio, Inc. is headquartered Goleta, California.
Recent News and Earnings
The company recently reported Q2 17 earnings where they beat both the Zacks consensus earnings and revenue estimates for the fifth consecutive quarter. Total revenues grew by +37%, and total billings were up +32.2% on a year over year (YoY) basis. The Value+ services saw the biggest YoY improvement in revenues as they were up +43%. The Property Management arm of the business saw the number of customers increase by +17% YoY, and the number of units under management rise by +22% YoY. The Legal segment saw customer growth improve by +21% YoY to almost 9,000 customers. The average revenues per unit jumped up by +38% as management streamlined sales, improved marketing performance, and targeted higher value customers.
Due to the impressive quarterly performance, management increased FY 17 guidance from a range between $136-138 million to a range between $138-139 million indicating a +31-32% YoY increase.
The Board of Directors also announced that the current CEO Brian Donahoo will be retiring and that Jason Randall will take over the position. Mr. Donahoo will be available through the end of the year to ensure a smooth transition. Mr. Randall was the SVP, and has been with the company for over nine years. While the retirement was not expected, the street viewed the transition as a positive.
Cree Inc.(NASDAQ: – Free Report), a Zacks Ranked #5 (Strong Sell) company is a market-leading innovator and manufacturer of semiconductors that enhance the value of solid-state lighting, power and communications products by significantly increasing their energy performance and efficiency. Key to Cree's market advantage is its world-class materials expertise in silicon carbide and gallium nitride for chips and packaged devices that can handle more power in a smaller space while producing less heat than other available technologies, materials and products.
Recent Earnings Results
Last week, management announced both F4Q17 and FY 17 results and overall it was a mixed bag. First the positives, both the LED and Wolfspeed businesses did better than expected on a year over year (YoY) basis; LED product revenues were up almost 10% while Wolfspeed revenues were up +8.4%. Now the negatives; on a YoY basis the company saw declines in revenues -8%, non-GAAP net income -78.9%. On a fiscal year basis for 2017 revenues were down -9% while non-GAAP net income was down -43.2%.
The big drag on the company was the lighting segment which saw revenues fall by almost -21% YoY, due to increased competition. This is not just a quarterly event as the segment has been underperforming for over a year. Another issue facing the company is the search for a new CEO as the previous CEO announced his departure in May. But there has been little to no movement on this front. Further, the current management team announced significantly increased capex plans; rising to an estimated $220 million from just $87 million in FY 2017. This increase in spending is almost solely focused on the Wolfspeed segment with the goal of doubling its capacity over the next 12 months.
Given the increased expenditures, management was forced to reduce F1Q17 revenue guidance from an expected consensus of $361 million to a range of $353-367 million. But EPS is expected to be more negatively impacted by this spending as non-GAAP EPS fell from a consensus of $0.11 to a range of $0.02-0.06. Lastly, non-GAAP gross margins will also be negatively impacted as they were lowered by almost a full percentage point; from 29.8% to almost 29%.
Additional content:
New Uber CEO Wants IPO on Timetable
On Wednesday, newly announced CEO of ride hailing giant Uber, Dara Khosrowshahi, said that the troubled tech startup should go public in the next 18 to 36 months.
During a meeting with employees at Uber’s headquarters in San Francisco, the former chief executive of Expedia (NASDAQ: EXPE – Free Report) said that he plans to make it a priority to “pay the bills.” This comes in opposition to Uber’s former leader and founder Travis Kalanick’s stance on an IPO, who famously was opposed to the idea, telling CNBC last year that he wanted “to make sure [an IPO] happens as late as possible.”
Uber, however, is notorious for losing insane amounts of money. Last year, the company lost a total of $2.8 billion, and in the first three months of this year, it lost $708 million (also read: Will Uber Be the Hottest IPO of 2017?).
In addition to divulging his IPO plans for his new company, Khosrowshahi also gave some insight into how he may run Uber. According to tweets from the handle @Uber_Comms, Uber’s new CEO said things like “I won’t B.S. you, and I hope you won’t B.S. me,” and “I’m all in, and I’m going to fight for you with every bone in my body.”
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today. Learn more >>
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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AppFolio, Cree and Expedia highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 31, 2017 – Zacks Equity Research AppFolio Inc.(NASDAQ: (APPF - Free Report) – Free Report)as the Bull of the Day, Cree Inc. (NASDAQ: – Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onExpedia(NASDAQ: (EXPE - Free Report) – Free Report).
Here is a synopsis of all three stocks:
Bull of the Day:
AppFolio Inc.(NASDAQ: (APPF - Free Report) – Free Report), a Zacks Ranked #1 (Strong Buy), offers cloud-based software solutions for property management and legal industries. It offers AppFolio Property Manager, a solution for the property managers including activities of posting and tracking tenant vacancies, handling the entire leasing process electronically, administering maintenance and repairs with their vendor networks, managing accounting and reporting to property owners. MyCase solution for practitioners and small law firms, providing time tracking, billing and payments, client communication, coordination with other lawyers and support staff, legal document management and assembly and general office administration services. Value+ services include Websites and electronic payment services. AppFolio, Inc. is headquartered Goleta, California.
Recent News and Earnings
The company recently reported Q2 17 earnings where they beat both the Zacks consensus earnings and revenue estimates for the fifth consecutive quarter. Total revenues grew by +37%, and total billings were up +32.2% on a year over year (YoY) basis. The Value+ services saw the biggest YoY improvement in revenues as they were up +43%. The Property Management arm of the business saw the number of customers increase by +17% YoY, and the number of units under management rise by +22% YoY. The Legal segment saw customer growth improve by +21% YoY to almost 9,000 customers. The average revenues per unit jumped up by +38% as management streamlined sales, improved marketing performance, and targeted higher value customers.
Due to the impressive quarterly performance, management increased FY 17 guidance from a range between $136-138 million to a range between $138-139 million indicating a +31-32% YoY increase.
The Board of Directors also announced that the current CEO Brian Donahoo will be retiring and that Jason Randall will take over the position. Mr. Donahoo will be available through the end of the year to ensure a smooth transition. Mr. Randall was the SVP, and has been with the company for over nine years. While the retirement was not expected, the street viewed the transition as a positive.
Bear of the Day:
Cree Inc.(NASDAQ: – Free Report), a Zacks Ranked #5 (Strong Sell) company is a market-leading innovator and manufacturer of semiconductors that enhance the value of solid-state lighting, power and communications products by significantly increasing their energy performance and efficiency. Key to Cree's market advantage is its world-class materials expertise in silicon carbide and gallium nitride for chips and packaged devices that can handle more power in a smaller space while producing less heat than other available technologies, materials and products.
Recent Earnings Results
Last week, management announced both F4Q17 and FY 17 results and overall it was a mixed bag. First the positives, both the LED and Wolfspeed businesses did better than expected on a year over year (YoY) basis; LED product revenues were up almost 10% while Wolfspeed revenues were up +8.4%. Now the negatives; on a YoY basis the company saw declines in revenues -8%, non-GAAP net income -78.9%. On a fiscal year basis for 2017 revenues were down -9% while non-GAAP net income was down -43.2%.
The big drag on the company was the lighting segment which saw revenues fall by almost -21% YoY, due to increased competition. This is not just a quarterly event as the segment has been underperforming for over a year. Another issue facing the company is the search for a new CEO as the previous CEO announced his departure in May. But there has been little to no movement on this front. Further, the current management team announced significantly increased capex plans; rising to an estimated $220 million from just $87 million in FY 2017. This increase in spending is almost solely focused on the Wolfspeed segment with the goal of doubling its capacity over the next 12 months.
Given the increased expenditures, management was forced to reduce F1Q17 revenue guidance from an expected consensus of $361 million to a range of $353-367 million. But EPS is expected to be more negatively impacted by this spending as non-GAAP EPS fell from a consensus of $0.11 to a range of $0.02-0.06. Lastly, non-GAAP gross margins will also be negatively impacted as they were lowered by almost a full percentage point; from 29.8% to almost 29%.
Additional content:
New Uber CEO Wants IPO on Timetable
On Wednesday, newly announced CEO of ride hailing giant Uber, Dara Khosrowshahi, said that the troubled tech startup should go public in the next 18 to 36 months.
During a meeting with employees at Uber’s headquarters in San Francisco, the former chief executive of Expedia (NASDAQ: EXPE – Free Report) said that he plans to make it a priority to “pay the bills.” This comes in opposition to Uber’s former leader and founder Travis Kalanick’s stance on an IPO, who famously was opposed to the idea, telling CNBC last year that he wanted “to make sure [an IPO] happens as late as possible.”
Uber, however, is notorious for losing insane amounts of money. Last year, the company lost a total of $2.8 billion, and in the first three months of this year, it lost $708 million (also read: Will Uber Be the Hottest IPO of 2017?).
In addition to divulging his IPO plans for his new company, Khosrowshahi also gave some insight into how he may run Uber. According to tweets from the handle @Uber_Comms, Uber’s new CEO said things like “I won’t B.S. you, and I hope you won’t B.S. me,” and “I’m all in, and I’m going to fight for you with every bone in my body.”
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today. Learn more >>
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.