Financial Analysis: Hello Group (NASDAQ:MOMO) and AppFolio (NASDAQ:APPF)

Hello Group (NASDAQ:MOMO) and AppFolio (NASDAQ:APPF) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Institutional & Insider Ownership

51.0% of Hello Group shares are held by institutional investors. Comparatively, 85.2% of AppFolio shares are held by institutional investors. 61.4% of Hello Group shares are held by insiders. Comparatively, 5.2% of AppFolio shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hello Group	$10.93 billion	0.11	$275.72 million	$0.97	8.40
AppFolio	$794.20 million	9.70	$204.07 million	$5.55	38.14

Hello Group has higher revenue and earnings than AppFolio. Hello Group 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 summary of current ratings and target prices for Hello Group and AppFolio, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hello Group	2	2	2	0	2.00
AppFolio	1	2	5	0	2.50

Hello Group currently has a consensus price target of $8.25, indicating a potential upside of 1.29%. AppFolio has a consensus price target of $276.29, indicating a potential upside of 30.53%. Given AppFolio’s stronger consensus rating and higher possible upside, analysts clearly believe AppFolio is more favorable than Hello Group.

Volatility and Risk

Hello Group has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, AppFolio has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hello Group	11.98%	11.41%	7.51%
AppFolio	25.69%	26.21%	20.82%

Summary

AppFolio beats Hello Group on 11 of the 14 factors compared between the two stocks.

About Hello Group

Hello Group Inc. provides mobile-based social and entertainment services in the People's Republic of China. It operates in three segments: Momo, Tantan, and QOOL. The company offers Momo, a mobile application that connects people and facilitates social interactions based on location, interests, and various online recreational activities, including live talent shows, short videos, social games, as well as other video- and audio-based interactive experiences, such as online parties, mobile karaoke and user participated reality shows; Tantan, a social and dating application; and other applications under the Hertz, Soulchill, Duidui, and Tietie names. The company also provides livestream services for various content and activities comprising talent shows, such as singing, dancing, and talk shows, as well as casual chatting, and other forms of interactions between broadcasters and viewers; value-added services; advertising and marketing services; and mobile games. The company was formerly known as Momo Inc. and changed its name to Hello Group Inc. in August 2021. Hello Group Inc. was incorporated in 2011 and is headquartered in Beijing, the People's Republic of China.

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.