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AppFolio (APPF) Hits 52-Week High, Can the Run Continue?
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Have you been paying attention to shares of AppFolio (APPF - Free Report) ? Shares have been on the move with the stock up 16.5% over the past month. APPF hit a new 52-week high of $79.7 in the previous session. AppFolio has gained 90.2% since the start of the year compared to the 10.5% move for the Zacks Computer and Technology sector and the 25% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 30, 2018, AppFolio reported EPS of $0.24 versus consensus estimate of $0.19 while it beat the consensus revenue estimate by 3.71%.
For the current fiscal year, AppFolio is expected to post earnings of $0.87 per share on $184.61 million in revenues. This represents a 93.33% change in EPS on a 28.38% change in revenues. For the next fiscal year, the company is expected to earn $1.35 per share on $229.59 million in revenues. This represents a year-over-year change of 55.17% and 24.36%, respectively.
Valuation Metrics
AppFolio may be at a 52-week high right now, but what might the future hold for APPF? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
AppFolio has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 90.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 119.4X versus its peer group's average of 28.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, AppFolio currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if AppFolio fits the bill. Thus, it seems as though APPF shares could have a bit more room to run in the near term.
How Does AppFolio Stack Up to the Competition?
Shares of AppFolio have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including One Stop Systems (OSS - Free Report) , j2 Global , and New Relic , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 39% of all the industries we have in our universe, so it looks like there are some nice tailwinds for APPF, even beyond its own solid fundamental situation.
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AppFolio (APPF) Hits 52-Week High, Can the Run Continue?
Have you been paying attention to shares of AppFolio (APPF - Free Report) ? Shares have been on the move with the stock up 16.5% over the past month. APPF hit a new 52-week high of $79.7 in the previous session. AppFolio has gained 90.2% since the start of the year compared to the 10.5% move for the Zacks Computer and Technology sector and the 25% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 30, 2018, AppFolio reported EPS of $0.24 versus consensus estimate of $0.19 while it beat the consensus revenue estimate by 3.71%.
For the current fiscal year, AppFolio is expected to post earnings of $0.87 per share on $184.61 million in revenues. This represents a 93.33% change in EPS on a 28.38% change in revenues. For the next fiscal year, the company is expected to earn $1.35 per share on $229.59 million in revenues. This represents a year-over-year change of 55.17% and 24.36%, respectively.
Valuation Metrics
AppFolio may be at a 52-week high right now, but what might the future hold for APPF? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
AppFolio has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 90.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 119.4X versus its peer group's average of 28.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, AppFolio currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if AppFolio fits the bill. Thus, it seems as though APPF shares could have a bit more room to run in the near term.
How Does AppFolio Stack Up to the Competition?
Shares of AppFolio have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including One Stop Systems (OSS - Free Report) , j2 Global , and New Relic , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 39% of all the industries we have in our universe, so it looks like there are some nice tailwinds for APPF, even beyond its own solid fundamental situation.