Okta (NASDAQ:OKTA) versus AppFolio (NASDAQ:APPF) Critical Review

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

Risk & Volatility

AppFolio has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Okta has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AppFolio	11.38%	14.51%	10.01%
Okta	-15.69%	-5.69%	-3.67%

Analyst Recommendations

This is a summary of current recommendations for AppFolio and Okta, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AppFolio	0	1	6	0	2.86
Okta	0	20	10	0	2.33

AppFolio presently has a consensus price target of $241.00, indicating a potential downside of 0.72%. Okta has a consensus price target of $100.39, indicating a potential upside of 8.77%. Given Okta’s higher possible upside, analysts clearly believe Okta is more favorable than AppFolio.

Insider and Institutional Ownership

62.3% of AppFolio shares are held by institutional investors. Comparatively, 86.6% of Okta shares are held by institutional investors. 9.2% of AppFolio shares are held by insiders. Comparatively, 7.4% of Okta shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares AppFolio and Okta’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AppFolio	$620.45 million	14.03	$2.70 million	$2.07	117.27
Okta	$2.26 billion	6.83	-$355.00 million	($2.17)	-42.53

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

Summary

AppFolio beats Okta on 9 of the 14 factors compared between the two stocks.

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.

About Okta

Okta, Inc. operates as an identity partner in the United States and internationally. The company offers Okta's suite of products and services used to manage and secure identities, such as Single Sign-On that enables users to access applications in the cloud or on-premises from various devices; Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications, and data; API Access Management enables organizations to secure APIs; Access Gateway enables organizations to extend Workforce Identity Cloud; and Okta Device Access enables end users to securely log in to devices with Okta credentials. It also provides Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization; Lifecycle Management enables IT organizations or developers to manage a user's identity throughout its lifecycle; Okta Identity Governance provides identity access management and identity governance solutions; Advanced Server Access offers access management to secure cloud infrastructure; Okta Privileged Access enables organizations to reduce risk with unified access and governance management for on-premises and cloud resources; and Okta Workforce Identity Workflows. In addition, the company offers Universal Login, which allows customers to provide login experience across different applications and devices; and Attack Protection, a suite of security capabilities that protects customers from different types of malicious traffic. Further, it provides Adaptive Multi-Factor Authentication, Passwordless, Machine to Machine, Private Cloud, Organizations, Actions and Extensibility, and Enterprise Connections. The company sells its products directly to customers through sales force and channel partners. The company was formerly known as Saasure, Inc. Okta, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.