APPF Should I Buy
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AppFolio Inc (APPF) is not a strong buy for a beginner, long-term investor at this moment. While the company has demonstrated strong revenue growth and favorable analyst ratings, the recent financial performance, technical indicators, and lack of significant positive catalysts suggest that waiting for a better entry point may be prudent. The stock's recent price decline and bearish technical signals indicate potential further downside in the short term.
The technical indicators for APPF are bearish. The MACD is below 0 and negatively contracting, RSI is at 28.181 (neutral zone), and the moving averages are in a bearish alignment (SMA_200 > SMA_20 > SMA_5). The stock is trading near its key support level at 175.472, with resistance at 184.572. The stock has a 70% chance to decline by -0.32% in the next day and a modest 0.39% gain in the next week, suggesting limited upside potential in the near term.
Revenue growth of 21.86% YoY in Q4
Gross margin improvement to 61.46%, up 2.48% YoY.
Analysts maintain strong ratings with multiple Buy and Overweight recommendations despite lowered price targets.
Net income dropped by -61.15% YoY in Q4 2025, and EPS declined by -60.57%.
Initial 2026 revenue growth guidance of 16.7% fell below Street expectations of 18.5%, leading to a selloff.
Bearish technical indicators and recent price decline (-1.57% in the regular market).
No recent news or significant trading trends from hedge funds, insiders, or Congress.
In Q4 2025, AppFolio reported revenue growth of 21.86% YoY to $248.19M, but net income dropped significantly by -61.15% YoY to $39.91M. EPS also declined by -60.57% YoY to $1.1. Gross margin improved to 61.46%, up 2.48% YoY, indicating operational efficiency despite declining profitability.
Analysts maintain a positive outlook with Buy and Overweight ratings, though price targets were lowered due to softer-than-expected 2026 revenue guidance. KeyBanc, DA Davidson, UBS, Keefe Bruyette, and Piper Sandler all reduced price targets but highlighted strong Q4 results and favorable business trends. The average price target remains significantly above the current price, indicating long-term potential.
