Appfolio Inc (NASDAQ: APPF)

Sector: Technology Industry: Software - Application CIK: 0001433195
Market Cap 8.20 Bn
P/B 16.44
P/E 40.25
P/S 9.05
ROIC (Qtr) 23.66
Div Yield % 0.00
Rev 1y % (Qtr) 21.20
Total Debt (Qtr) 34.53 Mn
Debt/Equity (Qtr) 0.07

About

AppFolio Inc., known by its ticker symbol APPF, is a prominent player in the real estate industry, providing cloud-based business management solutions. Since its inception in 2006, the company has been dedicated to helping property managers digitally transform their operations, tackle critical tasks, and enhance customer experience. AppFolio's platform serves as a system of record, engagement, and intelligence, offering a comprehensive solution for property managers. It is supplemented by AppFolio Realm, a suite of AI-powered tools that aid in...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 213.68M provides robust 6.19x coverage of total debt 34.53M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 490.99M provides 14.22x coverage of total debt 34.53M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 208.17M exceeds capital expenditure of 5.51M by 37.79x, indicating strong organic growth funding capability.
  • Retained earnings of 391.06M provide full 11.32x coverage of long-term debt 34.53M, indicating strong internal capital position.
  • Short-term investments of 124.06M provide solid 1.29x coverage of other current liabilities 96.32M, indicating strong liquidity.

Bear case

  • Operating cash flow of 213.68M barely covers its investment activities of (11.72M), with a coverage ratio of -18.24, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (11.72M) provide weak support for R&D spending of 186.76M, which is -0.06x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 76.09M provide limited coverage of acquisition spending of (78.33M), which is -0.97x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 213.68M shows concerning coverage of stock compensation expenses of 71.84M, with a 2.97 ratio indicating potential earnings quality issues.
  • Operating cash flow of 213.68M provides minimal -3.50x coverage of tax expenses of (61.10M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 12.74 2.65
EV to Cash from Ops. EV/CFO 38.19 13.37
EV to Debt EV to Debt 236.34 57.69
EV to EBIT EV/EBIT 57.21 19.12
EV to EBITDA EV/EBITDA 52.04 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF 39.20 14.69
EV to Market Cap EV to Market Cap 1.00 -92.28
EV to Revenue EV/Rev 9.01 4.60
Price to Book Value [P/B] P/B 16.44 4.26
Price to Earnings [P/E] P/E 40.25 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Int. cover (Qtr) 0.00 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 47.41 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 21.91 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 54.82 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -4.12 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) -7.43 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) -7.43 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) 53.83 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 20.82 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.17 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.42 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.76 3.75
Current Ratio Curr Ratio (Qtr) 3.02 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.07 0.17
Interest Cover Ratio Int Coverage (Qtr) 0.00 -52.32
Times Interest Earned Times Interest Earned (Qtr) 0.00 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 18.40 -100.06
EBIT Margin % EBIT Margin % (Qtr) 15.74 -164.24
EBT Margin % EBT Margin % (Qtr) 15.74 -116.94
Gross Margin % Gross Margin % (Qtr) 63.50 58.20
Net Profit Margin % Net Margin % (Qtr) 22.50 -121.65