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The AppFolio (NASDAQ:APPF) Share Price Is Up 434% And Shareholders Are Delighted

Simply Wall St

Investing can be hard but the potential fo an individual stock to pay off big time inspires us. You won't get it right every time, but when you do, the returns can be truly splendid. One bright shining star stock has been AppFolio, Inc. (NASDAQ:APPF), which is 434% higher than three years ago. Also pleasing for shareholders was the 17% gain in the last three months.

View our latest analysis for AppFolio

While AppFolio made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

AppFolio's revenue trended up 29% each year over three years. That's well above most pre-profit companies. And it's not just the revenue that is taking off. The share price is up 75% per year in that time. Despite the strong run, top performers like AppFolio have been known to go on winning for decades. In fact, it might be time to put it on your watchlist, if you're not already familiar with the stock.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

NasdaqGM:APPF Income Statement, February 24th 2020

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. If you are thinking of buying or selling AppFolio stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Pleasingly, AppFolio's total shareholder return last year was 88%. That gain actually surpasses the 75% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand AppFolio better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for AppFolio you should be aware of.

Of course AppFolio may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.