Financial Survey: Benefitfocus (BNFT) and AppFolio (APPF)

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

Valuation & Earnings

This table compares Benefitfocus and AppFolio’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Benefitfocus $233.34 million 3.50 -$40.05 million ($0.85) -30.71
AppFolio $105.59 million 13.55 -$8.28 million $0.16 263.45

AppFolio has lower revenue, but higher earnings than Benefitfocus. Benefitfocus 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 Benefitfocus and AppFolio’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Benefitfocus -10.28% N/A -14.48%
AppFolio 4.37% 7.91% 5.99%

Risk and Volatility

Benefitfocus has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, AppFolio has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Insider and Institutional Ownership

85.6% of Benefitfocus shares are held by institutional investors. Comparatively, 24.9% of AppFolio shares are held by institutional investors. 40.1% of Benefitfocus shares are held by company insiders. Comparatively, 44.8% of AppFolio shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Benefitfocus and AppFolio, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Benefitfocus 0 3 5 0 2.63
AppFolio 0 4 1 0 2.20

Benefitfocus presently has a consensus price target of $35.00, indicating a potential upside of 34.10%. AppFolio has a consensus price target of $40.50, indicating a potential downside of 3.91%. Given Benefitfocus’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Benefitfocus is more favorable than AppFolio.

Summary

AppFolio beats Benefitfocus on 8 of the 14 factors compared between the two stocks.

Benefitfocus Company Profile

Benefitfocus, Inc. (Benefitfocus) is a provider of cloud-based benefits management platform for consumers, employers, insurance carriers and brokers. The Benefitfocus Platform allows how organizations and individuals shop for, enroll in, manage and exchange benefits. The Company operates through two business segments: Employer, which derives its revenue from customers that use the Company’s services for the provision of benefits to their employees, and administrators acting on behalf of employers, Carrier, which derives its revenue from insurance companies that provide coverage at their own risk. Its solutions support benefits plans, including healthcare, dental, life and disability insurance, and voluntary benefits plans, such as critical illness, supplemental income and wellness programs. It provides a multi-tenant cloud-based benefits management platform to the employer and carrier markets.

AppFolio Company Profile

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.

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