Why You Should Add AppFolio Stock to Your Portfolio Now

AppFolio APPF is constantly striving to retain its leading position in the U.S. property management software market and is leveraging AI to streamline the customer onboarding process.

APPF aims to capture customers through the launch of innovative products, and its growth strategy involves migrating customers that use similar products in the market.

AppFolio has gained 33.5% in the year-to-date period, outperforming the Zacks Internet-Software Industry, which has returned 11.6% in the same timeframe.

This Zacks Rank #1 (Strong Buy) stock has a Growth Style Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology.

Robust Portfolio Boosts Competitive Prowess

APPF provides a range of property management services through AppFolio Property Manager Core, Plus and Max. It offers some value-added services, including online transaction services for property managers, tenant screening services and event insurance services to renters and landlords.

AppFolio operates in a range of verticals and has numerous competitors. The company competes with Entrata, RealPage, Buildium and Yardi in the property management software space. APPF also competes with TransUnion TRU Smartmove, RentSpree and TurboTenant in the tenant screening market space.

AppFolio has many advantages over its competitors. For instance, while customers may use TransUnion Smartmove for tenant screening, to get a holistic tenancy management that involves tenant and lease tracking, communication tools for tenant interaction and lease management, including renewal and reminders, they need APPF or other property management software.

AppFolio leverages AI for Smoother Customer Migrations

The customers of property management software companies include land owners, real estate investors, housing associations, property managers, and rental managers. These customers are often dissuaded by the lengthy onboarding process, which involves manual data migration and system setup, which makes them reluctant to switch from one property management software to another.

After the integration of AI into its platform, the company has been able to migrate customers 22% faster than before by using generative AI. Currently, APPF's property management software holds the largest market in the U.S., according to a report by 6sense.

The recent addition of generative AI features in AppFolio's software enables customers to input their financial, business and other foundational data into the platform at their own pace. The platform now leverages a conversational AI assistant, Realm-X, to reduce repetitive tasks, complete tasks and resolve queries.

This new addition to the platform is in line with AppFolio's long history of automating customer's tasks to improve experience. In the past, APPF had partnered with DocuSign DOCU and AvidXchange AVDX to streamline its customer experience.

AppFolio partnered with DocuSign in 2021 to automate and streamline its signing process through electronic signature. APPF partnered with AvidXchange to streamline the processing of invoices and payments.

APPF's persistent efforts to improve its offerings have contributed to its customer base, which grew 6% year over year to 19,941 customers in the first quarter of 2024.

Conclusion

AppFolio's focus on generative AI investments bodes well in the long term. APPF anticipates to grow at this pace, as reflected in its fiscal 2024 outlook. The company projects its revenues to be in the range of $766 million to $774 million.

The Zacks consensus estimate for the same has been pegged at $773.8 million, indicating year-over-year growth of 24.7%. AppFolio's earnings for fiscal 2024 has been revised upwards by 16 cents from $3.84 to $4 in the past 60 days.

The Zacks Consensus Estimate for earnings for fiscal 2024 is pegged at $4, indicating year-over-year growth of 134%. AppFolio's earnings for fiscal 2024 have been revised upward by 16 cents, from $3.84 to $4 in the past 60 days.

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