Bear Of The Day: AppFolio (APPF)
AppFolio (APPF) is a Zacks Rank #5 (Strong Sell) following a recent earnings miss. This marks the fourth consecutive miss for APPF and the stock continues to slide. That has been happening more and more of late, so let’s take a deeper look at this stock in this Bear of the Day article.
Description
AppFolio, Inc., together with its subsidiaries, provides industry-specific cloud-based business software solutions, services, and data analytics for the real estate industry. The company offers AppFolio Property Manager, a property management solution designed to address the operational and business requirements of property management companies and their business ecosystems; and AppFolio Investment Management, a cloud-based software solution for real estate investment managers of various sizes that provide tools and services designed to streamline their real estate investment management businesses. It also provides Value+ services that are designed to enhance, automate, and streamline processes and workflows for property management businesses, such as artificial intelligence leasing assistant, tenant screening, electronic payment, utility management, maintenance contact center, tenant debt collection, and mailing services. AppFolio, Inc. was incorporated in 2006 and is headquartered in Santa Barbara, California.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of APPF, I see four straight misses of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For APPF I see annual estimates moving lower.
The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is mixed for those numbers.
The current year 2022 consensus number has dropped from $0.28 to $0.01.
The next year has dropped from $0.58 to $0.22 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Chart
AppFolio, Inc. Price and Consensus
AppFolio, Inc. price-consensus-chart | AppFolio, Inc. Quote
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