Share price of AppFolio Inc. (NASDAQ:APPF) rallied to a new 52-week high of $39.33 on Aug 16, eventually closing a bit lower at $39.00. The stock has gained 63.5% year to date, substantially outperforming the 17.4% rally of the industry it belongs to.
The momentum can be attributed to AppFolio’s consistent results as well as positive 2017 guidance. We note that the company has beaten the Zacks Consensus Estimate in all the four quarters with an average positive surprise of 291.24%.
Moreover, following the results, the Zacks Consensus Estimate for 2017 surged from a penny to 15 cents over the last 30 days. Estimate for 2018 also jumped from 11 cents to 23 cents per share over the same period.
Currently, AppFolio carries a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Notably, the company has a market cap of $1.32 billion.
2017 Guidance Up
In the recently concluded second-quarter 2017, AppFolio reported earnings of 8 cents per share, which was well ahead of the Zacks Consensus Estimate of a loss of a penny. The company had reported a loss of 7 cents in the year-ago quarter.
The significant improvement was attributed to strong revenues, which surged almost 37% to $35.9 million. The figure was also better than the Zacks Consensus Estimate.
Following the results, AppFolio raised its 2017 revenue guidance. The company now projects revenues in the range of $138—$139 million, up from previous guidance range of $136—$138 million.
What’s Driving the Stock?
AppFolio offers cloud-based software solutions for property management and legal industry verticals. The company’s expanding customer base – 10,800 property manager and 9,000 legal customers – at the end of the second quarter is the key driver.
AppFolio’s Value+ services revenues jumped 43%, driven by increased usage of electronics payment platform and screening services.
Appfolio is highly focused on product and technology innovation. The company’s software applications, Appfolio Property Manager and MyCase, are aiding it to further leverage cloud-based business software solutions. The company is continuously enhancing product features per customer specifications, which is expected to expand its customer base further.
However, intense competition in the cloud-based business software solutions space remains a concern.
Key Picks
Microchip (NASDAQ:MCHP) , Applied Optoelectronics (NASDAQ:AAOI) and FormFactor (NASDAQ:FORM) are other stocks in the broad technology sector, which sport the same Zacks Rank as that of AppFolio (APPF).
Long-term earnings growth for Microchip, Applied Optoelectronics and FormFactor is currently pegged at 8%, 18.75% and 16%, respectively.
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AppFolio, Inc. (APPF): Free Stock Analysis Report
FormFactor, Inc. (FORM): Free Stock Analysis Report
Applied Optoelectronics, Inc. (AAOI): Free Stock Analysis Report
Microchip Technology Incorporated (MCHP): Free Stock Analysis Report
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