Sifting through countless of stocks in the Software industry can be tedious, and sometimes two stocks are just too similar to judge which is the better investment. If you’re on the fence about investing in AppFolio Inc or Appian Corp because you’re not sure how they measure up, it’s important to compare them on a few factors before making your decision.
Read on to learn how AppFolio Inc and Appian Corp compare based on key financial metrics to determine which better meets your investment needs.
About AppFolio Inc and Appian Corp
AppFolio, Inc. is a provider of cloud business management solutions for the real estate industry. The Company?s solutions enable its customers to digitally transform their businesses, automate and streamline critical business operations. AppFolio solutions are designed to meet that need in the real estate industry and assist an increasingly interconnected and growing ecosystem of users, including property managers, property owners, real estate investment managers, rental prospects, residents, and service providers, with critical transactions across the real estate lifecycle, including screening potential tenants, sending and receiving payments and providing insurance-related risk mitigation services. Its solutions include AppFolio?s platform, AppFolio Property Manager and AppFolio Property Manager Plus. The Company also offers a variety of value-added services, including electronic payment services, tenant screening services and insurance.
Appian Corporation is engaged in helping organizations build applications and workflows rapidly, with a low-code automation platform. The Company also offers customers various applications built on its platform to launch new business lines, automate vital employee workflows, manage complex trading platforms, accelerate drug development, and build global procurement systems. The Company's low-code automation platform employs an intuitive, visual interface and pre-built development modules that reduce the time required to build applications. The Company's Appian design interface is a model-driven, Web-based development environment for application creation, testing, deployment, and performance optimization. Its patented Self-Assembling Interface Layer (SAIL) technology ensures applications developed on its platform. The Company's decision designer studio is a graphical, no-code, visual design environment that enables information technology and businesspeople to automate any process.
Latest Software and AppFolio Inc, Appian Corp Stock News
As of February 13, 2023, AppFolio Inc had a $4.4 billion market capitalization, compared to the Software median of $824.5 million. AppFolio Inc’s stock is NA in 2023, NA in the previous five trading days and up 3.91% in the past year.
Currently, AppFolio Inc does not have a price-earnings ratio. AppFolio Inc’s trailing 12-month revenue is $471.9 million with a -14.4% net profit margin. Year-over-year quarterly sales growth most recently was 29.8%. Analysts expect adjusted earnings to reach $0.082 per share for the current fiscal year. AppFolio Inc does not currently pay a dividend.
Currently, Appian Corp does not have a price-earnings ratio. Appian Corp’s trailing 12-month revenue is $447.2 million with a -31.8% net profit margin. Year-over-year quarterly sales growth most recently was 27.6%. Analysts expect adjusted earnings to reach $-1.352 per share for the current fiscal year. Appian Corp does not currently pay a dividend.
How We Compare AppFolio Inc and Appian Corp Stock Grades
Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movements. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors streamline and work through such data.
AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A‐F grades for each of five key investing factors: value, growth, momentum, earnings estimate revisions and quality. Here, we’ll take a closer look at AppFolio Inc and Appian Corp’s stock grades to see how they measure up against one another.
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AppFolio Inc and Appian Corp Stock Value Grades
Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection.
Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point.
AAII’s A+ Investor Value Grade derives from a stock’s value score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are a good value and so on.
AppFolio Inc has a Value Score of 3, which is Ultra Expensive. Appian Corp has a Value Score of 7, which is Ultra Expensive.
The Value Stock Winner: No Clear Winner
Neither AppFolio Inc or Appian Corp has a high enough value grade to be considered a “winner.” Investors who are considering these companies should do additional due diligence and research to see if either could be a good addition to their portfolio. It’s important to look at a wide range of financial metrics in order to determine if AppFolio Inc or Appian Corp is the better investment when it comes to value.
AppFolio Inc and Appian Corp Growth Grades
The foundation of growth investing is seeking out stocks of companies exhibiting strong, consistent and prolonged growth that is expected to continue into the future.
In order to compute the growth score and assign it a letter grade, the percentile ranks for each of three components‐consistency of annual sales growth, five-year sales growth rankings adjusted for extreme levels, and consistency of positive annual cash from operations‐must be determined. These three rank figures are added together, and the sum is ranked against the entire stock universe to arrive at a company’s Growth Score to create an equal distribution of grades.
The companies in the bottom 20% of the stock universe receive Growth Grades of F, considered to be very weak, while those in the top 20% receive A grades, which are considered very strong.
AppFolio Inc has a Growth Score of 82, which is Very Strong. Appian Corp has a Growth Score of 56, which is Average.
The Growth Grade Winner: AppFolio Inc
As you can clearly see from the Growth Grade breakdown above, AppFolio Inc has a more attractive growth grade than Appian Corp. For investors who focus solely on how a company is growing relative to other companies in the same industry, AppFolio Inc could be a good stock to add to their portfolio. However, it’s important for investors to analyze multiple factors based on a wide range of metrics before deciding whether to buy.
AppFolio Inc and Appian Corp’s Quality Grades
Like the Value Grade, AAII’s A+ Investor Quality Grade comes from the percentile rank of key metrics. Specifically, the Quality Score is the percentile rank of the average of the percentile ranks of return on assets (ROA), return on invested capital (ROIC), gross profit relative to assets, buyback yield, change in total liabilities to assets, accruals, Z double prime bankruptcy risk (Z) score and the F-Score.
The score is variable, meaning it can consider all eight measures or, should any of the eight measures not be valid, the remaining measures that are valid. To be assigned a Quality Score, stocks must have a valid (non-null) measure and corresponding ranking for at least four of the eight quality measures.
The Quality Score is used to assess the underlying “quality” of a particular stock. A higher-quality stock possesses traits associated with upside potential and reduced downside risk. Backtesting of the Quality Grade shows that stocks with higher grades, on average, outperformed stocks with lower grades over the period of 1998 through 2019.
Stocks receive better grades (higher scores) for having higher scores for the quality subcomponents and worse grades (lower scores) for lower scores for the subcomponents.
AppFolio Inc has a Quality Score of 82, which is Very Strong. Appian Corp has a Quality Score of 38, which is Weak.
The Quality Grade Winner: AppFolio Inc
As you can clearly see from the Quality Grade breakdown above, AppFolio Inc has a better overall quality grade than Appian Corp. For investors who are looking for companies with higher quality than others in the same industry, AppFolio Inc could be a good stock to add to their portfolios. However, it’s important for investors to analyze multiple factors based on a wide range of metrics before deciding whether to buy.
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Other AppFolio Inc and Appian Corp Grades
In addition to Growth, Value and Quality, A+ Investor also provides grades for Momentum and Estimate Revisions.
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Momentum grades help uncover stocks experiencing anomalously high rates of return; research finds that stocks with high relative levels of momentum tend to outperform, whereas those with low levels of momentum tend to continue underperforming.
Earnings estimate revisions scores take into account the magnitude of a company’s earnings surprise in its last two reported fiscal quarters. Often, surprises beget further surprises‐or at least continued sales growth (the exact opposite is generally true, too).
These 2 key factors, when combined with the above, provide a holistic view into a particular stock. Further, by joining A+ Investor you can see whether AppFolio Inc and Appian Corp pass any of our 60+ stock screens that have outperformed the market since their creation.
So, Which Is the Better Investment, AppFolio Inc or Appian Corp Stock?
Overall, AppFolio Inc stock has a Value Score of 3, Growth Score of 82 and Quality Score of 82.
Appian Corp stock has a Value Score of 7, Growth Score of 56 and Quality Score of 38.
Comparing AppFolio Inc and Appian Corp’s grades, scores and metrics can act as a solid basis to determine whether they may be a good investment or not. You’ll also want to look at your portfolio’s asset allocation as well as your risk tolerance and financial goals to see if either of these stocks would make a good fit for you. AAII can help you figure out which investments align with your individual needs and preferences.
Investors are encouraged to do their own due diligence and research. In this way, individuals can effectively become managers of their own assets‐without having to rely on others for financial independence. You can count on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis.
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We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith, and we accept no liability for any errors or omissions. The full disclaimer can be read here.