What happened

Shares of AppFolio (NASDAQ:APPF) roared 85.7% higher in 2019, according to data from S&P Global Market Intelligence, as the real estate and property management-centric software-as-a-service company demonstrated sustained revenue growth and raised its full-year outlook with each of its quarterly reports.

So what

But AppFolio's rise wasn't exactly a straight line up. In fact, shares briefly plunged after each of its quarterly updates in late February and May before turning higher. And following its second-quarter report in late July, the stock even plunged nearly 20% from its peak before rallying hard on the heels of AppFolio's exceptional third-quarter results in late October.

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That latter report offers investors the most valuable perspective on the current state of AppFolio's business: Q3 revenue increased 35.5% year over year to $67.9 million, translating to net income of just under $5 million, or $0.14 per share (down from $0.16 per share a year earlier). Analysts, on average, were only expecting earnings of $0.06 per share on slightly lower revenue.

Speaking to the company's falling profits, during the subsequent conference call, AppFolio CFO Ida Kane noted that those results "[continue] to reflect our investments ahead of potential revenue in several growth areas that we believe will positively impact long-term shareholder value." Kane specifically singled out the company's AppFolio Property Manager Plus offering, a new investment management product, an AI leasing assistant solution, and the company's new AppFolio Utility Management software.

Now what

AppFolio also updated its full-year guidance to call for revenue of $254.5 million to $255.5 million, modestly increased from its previous target for a range of $253 million to $255 million.

As it stands, investors should receive their next color on AppFolio's growth story when the company releases fourth-quarter 2019 results early next month. So, while I wouldn't be surprised if shares pulled back regardless of how strong those result turn out to be, I think the stock could still have room to run higher if AppFolio shows signs its newest products are beginning to yield meaningful incremental growth.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.