Morgan Stanley is Waiting For Better Visibility at AppFolio

Morgan Stanley's Brain Essex downgraded

from Overweight to Equal-Weight while decreasing the price objective from $18.00 to $15.00. The analyst rating change came in response to AppFolio's FY2016Q1 earnings report slightly missing EPS consensus estimates at $(0.11) vs estimates of $(0.10). Essex claimed that AppFolio's 1Q results "illustrated progress but lack of visibility remains a challenge." The Morgan Stanley analyst feared that due to reporting "a slightly lower resulting growth forecast" and ongoing "cash burn" that the stock will remain under pressure.

"Focus on quality over higher growth has us adjusting revenue forecast slightly lower" Essex said. In addition, the analyst believed "investors will not yet award the stock a multiple that reflects better profitability," especially after recently missing earnings. AppFolio was trading at $12.52 up 0.32% in the premarket.