APPF
AppFolio Inc.
$167.84
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 18.8% below fair value
You pay
$167.84
Bear
$124.79
Fair
$206.68
Bull
$303.29
Bear
$124.79
-25.7%
10% stage 1 growth, 11% discount
Fair
$206.68
+23.1%
17% stage 1 growth, 11% discount
Bull
$303.29
+80.7%
23% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (17% base case)
Terminal Value % of EV
45%
Implied Market Multiple
31.4x
Market is pricing in (growth)
15.0%
vs 17.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $236.67 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $206.68 per share.
Warnings
Stock-based employee pay equals 50% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions