Real Estate Software Company AppFolio (APPF) is an IBD 50 Growth Stocks To Watch pick on Monday, as it recently announced new artificial intelligence technology for its property management software platform. Now the AI ​​stock is near a buy point after a flat base.
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AppFolio’s platform integrates accounting, staffing, marketing, and property management functions. It is used to manage single-family, multi-family, commercial, and student housing properties.
On June 18, AppFolio announced its new artificial intelligence software capabilities, called Realm-X. The Realm-X Assistant can generate reports and initiate and automate tasks for managing vendors, residents, and owners. And the new Realm-X Messages is used to communicate with residents.
AppFolio is ranked No. 1 out of 37 stocks in the computer software-specialty enterprise group. That sector ranks No. 79 out of IBD’s 197 industry groups.
Stocks approaching a buy point
Stocks retreated for a second straight day on Monday. The AI ​​software stock is in a second-phase flat base with a buy point of 256.73, according to MarketSurge pattern recognition. The buy point coincides with its all-time high.
An early entry is also seen at 243.04. AppFolio reclaimed its 50-day moving average with a 5.5% gain last week. The stock is up 40% so far this year, and that follows a 64% gain for 2023.
AI Stocks: Triple-Digit Earnings Growth Expected
AppFolio beat first-quarter earnings and revenue expectations on April 25, with earnings per share rising to $1.05 from a loss of one cent in the first quarter of 2023. Quarterly revenue growth has averaged 36% over the past three quarters.
The company raised its full-year 2024 revenue forecast above analysts’ estimates to $766 million to $774 million in its earnings release. Meanwhile, free cash flow improved significantly to a surplus of $41 million at the end of the first quarter, compared to a deficit of $0.4 million in the year-ago quarter.
Second-quarter earnings estimates call for a sharp 281% gain, then slowing to 67% and 13% in the next two periods. Second-quarter revenue growth is expected to slow to 30%, then 19% and 15% in the next two quarters. FactSet’s full-year earnings per share forecasts call for a 133% increase in 2024, then a 30% increase in 2025.
Mutual funds have bought shares of AI, with 549 funds holding the shares in March, compared to 511 in December and 432 in September.
The IBD Composite Rating for AppFolio shares is 98 out of a possible 99. The Earnings Per Share Rating of 80 includes a loss in 2022 and a dismal year in 2021.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
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