TIP698: BEST QUALITY STOCK IDEA Q1 2025
W/ CLAY FINCK & KYLE GRIEVE
13 February 2025
On today’s episode, Clay and Kyle give an overview of their best quality stock idea for Q1 2025. This quarter, they discuss AppFolio.
AppFolio is a high-growth software company revolutionizing property management. Clay and Kyle explore its impressive revenue growth, competitive advantages, and how AI-driven innovations like Realm-X are helping AppFolio capture market share. The conversation also covers key risks, the competitive landscape, and the company’s valuation, providing listeners with a comprehensive analysis of whether AppFolio is a compelling investment opportunity.
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IN THIS EPISODE, YOU’LL LEARN:
- A business overview of AppFolio.
- The five parties that AppFolio supports with their software services.
- How AppFolio is utilizing AI to create a moat around their business.
- Why AppFolio is a payments business disguised as a SAAS business.
- An overview of the competitive environment for AppFolio.
- Why we would consider adding back R&D expenses to determine a proper valuation for the business.
- An assessment of AppFolio’s management team, incentives, and valuation.
- And so much more!
TRANSCRIPT
Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.
[00:00:00] Clay Finck: On today’s episode, my co-host Kyle Grieve and I give an overview of our best quality stock idea for Q1 2025. This quarter, we’re discussing AppFolio. AppFolio is a high growth software company revolutionizing property management. Since its IPO in 2015, the stock has compounded at around 35 percent per year.
[00:00:21] Clay Finck: As you’ll hear during this episode, the more Kyle and I dug into this business, the more we came to like it. During this conversation, we discuss AppFolio’s business model, the five parties that AppFolio supports with their software services, how they’re utilizing AI to create a moat around their business, why they just might be a payments business disguised as a SaaS business, an overview of the competitive environment, and why we would consider adding back R&D expenses to determine a proper valuation for the stock.
[00:00:51] Clay Finck: At the end of the episode, we also touch on the events we’re hosting for our TIP Mastermind community in Omaha during the Berkshire Weekend in May 2025. We’ll be temporarily closing the community to new members at the end of March, so be sure to stick around until the end of the episode to learn more.
[00:01:07] Clay Finck: We’re also hosting a couple of free events in Omaha, which will be organized by my colleague Shawn O’Malley. You can find more information on those events in the show notes. With that, I bring you today’s episode on AppFolio.
[00:01:23] Intro: Since 2014, and through more than 180 million downloads, we’ve studied the financial markets and read the books that influenced self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your hosts, Clay Fink and Kyle Grieve.
[00:01:49] Clay Finck: Welcome to The Investor’s Podcast. I’m your host Clay Finck. And today Kyle and I present our best quality ideas series where each quarter we dive into a quality stock to share more about the business, its competitive advantages, potential risks, and what we think of the valuation. So Kyle, after speaking with Adam Seessel here on the podcast, he’s author of where the money is.
[00:02:11] Clay Finck: I’ve really wanted to cover a tech business here in our series because tech is just a trend that has brought some of the best and most profitable businesses the world has ever seen. Everyone’s familiar with the magnificent seven, but I’d really didn’t want to cover a two or three trillion company here on the show that everyone already knows about.
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BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
- Research stocks and SEC filings with Fintool.
- Mentioned Episode TIP465: Value Investing in the Digital Age w/ Adam Seessel.
- Related Episode: TIP604: Best Quality Idea Q1 2024 w/ Clay Finck & Kyle Grieve.
- Related Episode: TIP627: Best Quality Idea Q2 2024 w/ Clay Finck & Kyle Grieve.
- Related Episode: TIP652: Best Quality Idea Q3 2024 w/ Clay Finck & Kyle Grieve.
- Related Episode: TIP675: Best Quality Idea Q4 2024 w/ Clay Finck & Kyle Grieve.
- Email Shawn at shawn@theinvestorspodcast.com to attend our free events in Omaha or visit this page.
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