AppFolio (NASDAQ:APPF) versus Strategy (NASDAQ:MSTR) Critical Survey

Strategy (NASDAQ:MSTR) and AppFolio (NASDAQ:APPF) are both technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Analyst Recommendations

This is a summary of recent ratings for Strategy and AppFolio, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Strategy	1	2	12	2	2.88
AppFolio	0	3	9	0	2.75

Strategy presently has a consensus target price of $251.21, suggesting a potential upside of 77.39%. AppFolio has a consensus target price of $250.00, suggesting a potential upside of 20.74%. Given Strategy’s stronger consensus rating and higher possible upside, analysts clearly believe Strategy is more favorable than AppFolio.

Insider & Institutional Ownership

59.8% of Strategy shares are owned by institutional investors. Comparatively, 85.2% of AppFolio shares are owned by institutional investors. 5.4% of Strategy shares are owned by insiders. Comparatively, 1.6% of AppFolio shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Strategy has a beta of 3.56, suggesting that its share price is 256% more volatile than the S&P 500. Comparatively, AppFolio has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Earnings and Valuation

This table compares Strategy and AppFolio”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Strategy	$477.23 million	114.02	-$3.85 billion	($97.21)	-1.46
AppFolio	$1.09 billion	6.74	$140.92 million	$4.74	43.68

AppFolio has higher revenue and earnings than Strategy. Strategy is trading at a lower price-to-earnings ratio than AppFolio, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Strategy and AppFolio’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Strategy	-6,102.95%	-74.18%	-50.25%
AppFolio	15.62%	33.56%	27.03%

Summary

AppFolio beats Strategy on 8 of the 15 factors compared between the two stocks.

About Strategy

Strategy Incorporated, formerly known as MicroStrategy, provides artificial intelligence-powered enterprise analytics software and services in the United States, Europe, the Middle East, Africa, and internationally. It offers Strategy ONE, a platform that allows non-technical users to access novel and actionable insights for decision-making, and Strategy Cloud for Government, which provides always-on threat monitoring designed to meet the strict technical and regulatory standards of governments and financial institutions. The company also delivers Strategy Support, helping customers achieve system availability and usage goals through responsive troubleshooting; Strategy Consulting, offering architecture and implementation services; and Strategy Education, which includes free and paid learning options. In addition, the company is actively involved in Bitcoin development. The company offers its services through direct sales force and channel partners. It serves the U.S. government, state and local governments, and government agencies, as well as a range of industries, including retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications, and the public sector. The company was incorporated in 1989 and is headquartered in Tysons Corner, Virginia.

About AppFolio

AppFolio, Inc., together with its subsidiaries, provides cloud business management solutions for the real estate industry in the United States. The company provides a cloud-based platform that enables users to automate and optimize common workflows; tools that assist with leasing, maintenance, and accounting; and other technology and services offered by third parties. It offers AppFolio Property Manager Core, a platform that provides the basic functionalities required to operate a property management business, as well as serves as a system of record; AppFolio Property Manager Plus, which offers housing management, student housing management, complex accounting, leasing insights, large-scale operations support, role-based permissions, stack integrations, and enhanced customer support services; AppFolio Property Manager Max offers customer relationship management functionality, field customization, customer database functionality, and customer success management services; and AppFolio Investment Manager, a software that provides investment management, asset management, and relationship management solutions. The company also provides value-added services that are designed to enhance, automate, and streamline processes and workflows for property management businesses, such as electronic payment, tenant screening, and insurance services. AppFolio, Inc. was incorporated in 2006 and is headquartered in Santa Barbara, California.