AppFolio (APPF) To Report Q1 Results: What's In The Offing?

AppFolio Inc. (NASDAQ:APPF) is slated to report first-quarter 2018 results on Apr 30. Notably, the company has a decent positive earnings surprise history. The stock has surpassed the Zacks Consensus Estimate in the trailing four quarters, recording an astounding average positive earnings surprise of 221.43%.

In fourth-quarter 2017, the company delivered earnings of 12 cents, beating the Zacks Consensus Estimate of 9 cents. However, quarterly earnings were flat compared with the year-ago quarter. Revenues surged 35% to $37.9 million and exceeding the Zacks Consensus Estimate of $36 million.

Let's see how things are shaping up prior to the announcement.

What Does the Zacks Model Unveil?

Our proven model shows that a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Sell-rated stocks (4 or 5) are best avoided, especially when the company is seeing negative estimate revisions.

AppFolio has a Zacks Rank #2 and Earnings ESP of 0.00%, which makes surprise prediction difficult.

However, on a year-over-year basis, the company is likely to report robust top and bottom-line growth.

The Zacks Consensus Estimate for the quarter under review is pegged at 12 cents, which is way higher than the year-ago quarter’s figure of 4 cents. We note that, the Zacks Consensus Estimate has remained unchanged over the past 30 days. Additionally, analysts polled by Zacks project revenues of roughly $41 million, up 27.7% from the year-ago quarter.

Notably, Appfolio shares have gained 16.5% in the year-to-date period, substantially outperforming industry’s growth of meager 4.4%.

Factors to Consider

AppFolio’s sustained focus on product and technology related innovations remain key catalysts. Upgrades to product suite based on customer feedback which are directed toward making the offerings user friendly, is likely to bolster its customer base.

AppFolio platform’s integration with Amazon’s voice service, Alexa is likely to boost the top line, going forward. This feature will allow tenants to pay rents or submit other requests using voice commands through AppFolio’s platform. We believe the company’s collaboration with Amazon (NASDAQ:AMZN) along with the expansion of its offerings will bolster the top line, going ahead.

Notable product upgrades and enhancements including the likes of AppFolio Renters Insurance, a new Value+ Service, and same day ACH, an addition to the existing Electronic Payments Value+ Platform are likely to benefit adoption.

During the fourth quarter of 2017, the company had upgraded its product suite by enhancing features to its existing Electronic Payments Value+ Platform. In the fourth quarter, Value + services revenue surged 42% year over year to $20.8 million.

These advancements are projected to increase the customer base of the company, which comprised 11,700 property managers and around 10,000 legal customers at the end of 2017.

However, intensifying competition in the cloud based business software solutions space remains a concern.

Stocks with Favorable Combination

Here are a few stocks from the broader technology sector, you may want to consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Seagate Technology Plc (NASDAQ:STX) has an Earnings ESP of +3.43% and a Zacks Rank #1.

Paycom Sotware, Inc. (NYSE:PAYC) has an Earnings ESP of +0.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortinet, Inc. (NASDAQ:FTNT) has an Earnings ESP of +2.70% and a Zacks Rank #2.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>