Critical Contrast: Strategy (NASDAQ:MSTR) versus AppFolio (NASDAQ:APPF)

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

Institutional & Insider Ownership

59.8% of Strategy shares are owned by institutional investors. Comparatively, 85.2% of AppFolio shares are owned by institutional investors. 5.4% of Strategy shares are owned by company insiders. Comparatively, 1.6% of AppFolio shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Strategy has a beta of 3.56, meaning that its share price is 256% more volatile than the S&P 500. Comparatively, AppFolio has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Strategy and AppFolio, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Strategy	1	2	12	2	2.88
AppFolio	0	3	9	0	2.75

Strategy presently has a consensus price target of $246.13, suggesting a potential upside of 68.57%. AppFolio has a consensus price target of $250.00, suggesting a potential upside of 18.70%. Given Strategy’s stronger consensus rating and higher possible upside, research analysts clearly believe Strategy is more favorable than AppFolio.

Valuation and Earnings

This table compares Strategy and AppFolio”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Strategy	$477.23 million	117.56	-$3.85 billion	($97.21)	-1.50
AppFolio	$950.82 million	7.85	$140.92 million	$4.74	44.43

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

	Net Margins	Return on Equity	Return on Assets
Strategy	-6,102.95%	-74.18%	-50.25%
AppFolio	15.62%	33.56%	27.03%

Summary

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

About Strategy

Strategy Incorporated, formerly known as MicroStrategy, provides artificial intelligence-powered enterprise analytics software and services in the United States, Europe, the Middle East, Africa, and internationally. It offers Strategy ONE, a platform that allows non-technical users to access novel and actionable insights for decision-making, and Strategy Cloud for Government, which provides always-on threat monitoring designed to meet the strict technical and regulatory standards of governments and financial institutions. The company also delivers Strategy Support, helping customers achieve system availability and usage goals through responsive troubleshooting; Strategy Consulting, offering architecture and implementation services; and Strategy Education, which includes free and paid learning options. In addition, the company is actively involved in Bitcoin development. The company offers its services through direct sales force and channel partners. It serves the U.S. government, state and local governments, and government agencies, as well as a range of industries, including retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications, and the public sector. The company was incorporated in 1989 and is headquartered in Tysons Corner, Virginia.

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.