AppFolio falls 6.6% after UBS downgrade

• AppFolio (NASDAQ:APPF) shares fell 6.6% to $189.87 after UBS downgraded the stock to Neutral from Buy.
• UBS raised its price target to $220 from $200, below the Wall Street median target of $230.81.
• The brokerage cited moderating unit growth, tougher multifamily conditions and slower expected revenue growth per user.

AppFolio (NASDAQ:APPF) shares fell 6.6% to $189.87 on Wednesday after UBS downgraded the real estate software company to Neutral from Buy, citing a more balanced risk-reward outlook.

UBS said higher interest rates, financing constraints and weaker multifamily market conditions could moderate unit growth, prompting the brokerage to cut its fiscal 2027 average revenue per user growth estimate to 5.5% from 6.3%.

The brokerage raised its AppFolio price target by $20 to $220, compared with a Wall Street median target of $230.81 based on LSEG data.

UBS said potential upside from AppFolio's artificial intelligence products and value-added services remains possible, although adoption is still at an early stage and customer feedback on some products has been mixed.

UBS based its higher target on an 18.5-times calendar 2028 enterprise value-to-free-cash-flow multiple, up from 16 times.

Following the announcement, AppFolio's share price was down 6.6% at $189.87.

Eight of the 10 analysts covering AppFolio rate the shares Strong Buy or Buy, while the remaining two analysts have Hold ratings.

AppFolio shares are down about 18% year to date following Wednesday's decline, compared with a roughly 25% gain for the S&P 400 Software & Services Index over the same period.