Financial Review: Oracle (NYSE:ORCL) vs. AppFolio (NASDAQ:APPF)

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

Volatility and Risk

Oracle has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, AppFolio has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oracle	1	10	17	1	2.62
AppFolio	1	2	5	0	2.50

Oracle currently has a consensus target price of $181.48, suggesting a potential upside of 18.05%. AppFolio has a consensus target price of $261.88, suggesting a potential upside of 7.97%. Given Oracle’s stronger consensus rating and higher probable upside, analysts clearly believe Oracle is more favorable than AppFolio.

Earnings & Valuation

This table compares Oracle and AppFolio”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oracle	$54.93 billion	7.83	$10.47 billion	$4.09	37.59
AppFolio	$762.37 million	11.56	$2.70 million	$3.59	67.56

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

Institutional and Insider Ownership

42.4% of Oracle shares are held by institutional investors. Comparatively, 85.2% of AppFolio shares are held by institutional investors. 42.2% of Oracle shares are held by company insiders. Comparatively, 5.2% of AppFolio shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oracle	21.16%	133.25%	9.55%
AppFolio	17.26%	30.64%	23.53%

Summary

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

About Oracle

Oracle Corporation offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software as a service offering include various cloud software applications, including Oracle Fusion cloud enterprise resource planning (ERP), Oracle Fusion cloud enterprise performance management, Oracle Fusion cloud supply chain and manufacturing management, Oracle Fusion cloud human capital management, Oracle Cerner healthcare, Oracle Advertising, and NetSuite applications suite, as well as Oracle Fusion Sales, Service, and Marketing. The company also offers cloud-based industry solutions for various industries; Oracle application licenses; and Oracle license support services. In addition, it provides cloud and license business' infrastructure technologies, such as the Oracle Database and MySQL Database; Java, a software development language; and middleware, including development tools and others. The company's cloud and license business' infrastructure technologies also comprise cloud-based compute, storage, and networking capabilities; and Oracle autonomous database, MySQL HeatWave, Internet-of-Things, digital assistant, and blockchain. Further, it provides hardware products and other hardware-related software offerings, including Oracle engineered systems, enterprise servers, storage solutions, industry-specific hardware, virtualization software, operating systems, management software, and related hardware services; and consulting and customer services. The company markets and sells its cloud, license, hardware, support, and services offerings directly to businesses in various industries, government agencies, and educational institutions, as well as through indirect channels. The company has a collaboration with Amdocs Limited to empower customers on their journey towards cloud and digital adoption. Oracle Corporation was founded in 1977 and is headquartered in Austin, Texas.

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.