Shares of AppFolio (APPF 0.76%) jumped Friday after the real-estate software company reported a substantial surge in revenue growth and a meaningful improvement in profitability in the third quarter. The stock touched a new all-time high early in the session, and as of 12:45 p.m. ET, it was up by 7.7%.
AppFolio shrugs off the market slump
AppFolio, which offers cloud-based software for managing rental properties, reported its results for the third quarter after the close Thursday. Revenue was up 32% year over year to $165.4 million, its highest quarterly growth rate since 2019. This was ahead of expectations, bolstered by the sequential addition of roughly 100,000 net new rental units managed by its software.
NASDAQ: APPF
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Moreover, AppFolio's operating income improved from a $7.8 million loss last year to a loss of only $100,000 this year -- essentially breakeven.
A couple of analysts raised their price targets for AppFolio stock in light of the Q3 results. For example, DA Davidson analyst Peter Heckmann has a buy recommendation on AppFolio, and according to StreetInsider, he just raised his price target on it from $230 per share to $240 per share.
AppFolio expects a strong finish in 2023
In light of that strong quarterly performance, AppFolio's management raised its full-year revenue guidance. Before, it had been predicting revenue in the range of $592 million to $598 million. Now, it expects revenue of between $608 million and $612 million.
The midpoint of that new guidance range assumes fourth-quarter revenue of $161.4 million, which would be about a 30% year-over-year jump. That's solid growth in a challenging market, and it could keep AppFolio stock flirting with its highs.
