Contrasting AppFolio (NASDAQ:APPF) & ServiceTitan (NASDAQ:TTAN)

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

Insider and Institutional Ownership

85.2% of AppFolio shares are held by institutional investors. 39.9% of ServiceTitan shares are held by company insiders. Comparatively, 1.6% of AppFolio shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

ServiceTitan has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500. Comparatively, AppFolio has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ServiceTitan	-12.12%	-5.65%	-4.93%
AppFolio	15.13%	32.42%	25.82%

Valuation & Earnings

This table compares ServiceTitan 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
ServiceTitan	$960.97 million	7.24	-$159.85 million	($1.36)	-53.06
AppFolio	$1.04 billion	6.95	$140.92 million	$4.38	46.63

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for ServiceTitan and AppFolio, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServiceTitan	1	2	14	0	2.76
AppFolio	0	2	9	1	2.92

ServiceTitan presently has a consensus price target of $96.38, indicating a potential upside of 33.56%. AppFolio has a consensus price target of $248.50, indicating a potential upside of 21.66%. Given ServiceTitan’s higher possible upside, equities analysts plainly believe ServiceTitan is more favorable than AppFolio.

Summary

AppFolio beats ServiceTitan on 11 of the 15 factors compared between the two stocks.

About ServiceTitan

ServiceTitan, Inc. engages in the collection of field service activities required to install, maintain, and service the infrastructure and systems of residences and commercial buildings. The company was founded by Ara Mahdessian and Vahe Kuzoyan on June 8, 2008 and is headquartered in Glendale, CA.

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.