Critical Contrast: Five9 (NASDAQ:FIVN) and AppFolio (NASDAQ:APPF)

AppFolio (NASDAQ:APPF) and Five9 (NASDAQ:FIVN) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, valuation, earnings and profitability.

Volatility & Risk

AppFolio has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, Five9 has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Earnings and Valuation

This table compares AppFolio and Five9″s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AppFolio	$794.20 million	11.15	$204.07 million	$5.57	44.25
Five9	$1.13 billion	1.42	-$12.80 million	$0.36	56.86

AppFolio has higher earnings, but lower revenue than Five9. AppFolio is trading at a lower price-to-earnings ratio than Five9, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares AppFolio and Five9’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AppFolio	22.48%	25.97%	20.95%
Five9	0.80%	8.91%	2.91%

Analyst Ratings

This is a summary of current ratings and price targets for AppFolio and Five9, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AppFolio	0	0	7	0	3.00
Five9	1	5	13	0	2.63

AppFolio presently has a consensus target price of $310.20, suggesting a potential upside of 25.84%. Five9 has a consensus target price of $35.19, suggesting a potential upside of 71.90%. Given Five9’s higher probable upside, analysts plainly believe Five9 is more favorable than AppFolio.

Insider and Institutional Ownership

85.2% of AppFolio shares are held by institutional investors. Comparatively, 96.6% of Five9 shares are held by institutional investors. 4.7% of AppFolio shares are held by insiders. Comparatively, 1.6% of Five9 shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

AppFolio beats Five9 on 8 of the 14 factors compared between the two stocks.

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.

About Five9

Five9, Inc., together with its subsidiaries, provides intelligent cloud software for contact centers in the United States, India, and internationally. It offers a virtual contact center cloud platform that delivers a suite of applications, which enables the breadth of contact center-related customer service, sales, and marketing functions. The company’s platform comprises of including interactive virtual agent, agent assist, workflow automation, workforce engagement management, AI insights, and AI summaries that allows to manage and optimize customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces. It also matches each customer interaction with an agent resource and delivers customer data to the agent in real-time through integrations with adjacent enterprise applications, such as CRM software, to optimize the customer experience and enhance agent productivity. The company serves customers in various industries, such as banking and financial services, business process outsourcers, retail, healthcare, technology, and education. Five9, Inc. was incorporated in 2001 and is headquartered in San Ramon, California.