Financial Survey: AppFolio (APPF) vs. QAD (QADA)

AppFolio (NASDAQ: APPF) and QAD (NASDAQ:QADA) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for AppFolio and QAD, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AppFolio 0 4 1 0 2.20
QAD 0 1 3 0 2.75

AppFolio presently has a consensus target price of $42.50, indicating a potential upside of 5.64%. QAD has a consensus target price of $44.50, indicating a potential upside of 8.14%. Given QAD’s stronger consensus rating and higher possible upside, analysts clearly believe QAD is more favorable than AppFolio.

Dividends

QAD pays an annual dividend of $0.14 per share and has a dividend yield of 0.3%. AppFolio does not pay a dividend. QAD pays out -13.6% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares AppFolio and QAD’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AppFolio $105.59 million 12.94 -$8.28 million $0.16 251.45
QAD $277.97 million 2.85 -$15.45 million ($1.03) -39.95

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

Volatility & Risk

AppFolio has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, QAD has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Insider & Institutional Ownership

24.7% of AppFolio shares are owned by institutional investors. Comparatively, 44.9% of QAD shares are owned by institutional investors. 44.8% of AppFolio shares are owned by company insiders. Comparatively, 44.1% of QAD shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
AppFolio 4.37% 7.91% 5.99%
QAD -6.40% -2.06% -0.86%

Summary

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

About AppFolio

AppFolio, Inc. is a provider of industry-specific, cloud-based software solutions for small and medium-sized businesses (SMBs) in the property management and legal industries. The Company’s mobile-optimized software solutions enable its customers to work at any time and from anywhere across multiple devices. Its property management software provides small and medium-sized property managers with an end-to-end solution to their business needs. The Company’s legal software provides solo practitioners and small law firms with a streamlined practice and case management solution, allowing them to manage their practices and case load. It also offers Value+ services, such as its professionally designed Websites and electronic payment services. The Company’s property manager customers include third-party managers and owner-operators, managing single- and multi-family residences, commercial property and student housing, as well as mixed real estate portfolios.

About QAD

QAD Inc. (QAD) is a provider of vertically oriented enterprise software solutions for global manufacturing companies across the automotive, life sciences, consumer products, food and beverage, high technology and industrial products industries. QAD Enterprise Applications enables measurement and control of business processes and supports operational requirements, including financials, manufacturing, demand and supply chain planning, customer management, business intelligence and business process management. QAD delivers components of its solution for a range of mobile platforms. The Company’s mobile suite includes a requisition approval solution, a mobile business intelligence solution, mobile browse capability and mobile application monitoring tools to support system administrators. Its mobile browse capability allows users to view, filter and sort data accessible through QAD Browses within QAD Enterprise Applications using mobile devices.

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