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(This originally ran in Herb Greenberg's Reality Check)

SAN DIEGO (TheStreet) -- This update to our Reality Check of two weeks ago on RealPage (RP) - Get Free Report:

Not only did the apartment-management software company miss fourth-quarter revenue and earnings, but it missed and guided down on perhaps the most important metric of all: Organic growth -- and not in a small way.

At RealPage, the target was 20% to 25%. As recently as a quarter ago, the company appeared to be exceedingly confident it would easily hit it.

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Consider this exchange between analyst Jobin Mathew of Deutsche Bank and CFO Tim Barker:


"In the past, you've always talked about kind of your target growth model of operating between the 20% to 25% range. So looking out into 2014, without actually providing a guidance number, do you think you could step up closer to the high end of your target range?"


"Yes, we like to provide consistent guidance one year out and stick with providing our guidance when we have the visibility for the year. We've executed 20% this year. Since we've gone public, the organic on-demand growth has been 22.5%. We've had periods in the 25% and periods in the 20%...we'll continue to execute on a consistent basis and drive towards our target model."

Compare that with what the company is saying now:

"On-demand revenue for the first three quarters of the year trended at 20% organic growth, and the full-year came in at 18%. Despite this, fourth quarter organic on-demand revenue growth slowed significantly to 12%. Some of the factors driving fourth-quarter performance will take time to turn around and we expect other factors to show improvement more quickly."

And as for the year:

"...we expect our organic revenue growth to fall below our long-term target operating model of 20% to 25% in the first half of 2014, but improve in the second half of 2014."

Reality: What I know is things don't turn on a dime like that. The company gave a few reasons for the poor performance, but maybe Mark Roberts of Off Wall Street Research was on to something. In my original report, I wrote that he had suggested the company was tinkering with its accounting to make numbers look better. He thought, in fact, had the accounting been left alone organic growth in the third quarter would have been 15% rather than 20%. Turns out even he may have been high. "It looks like their accounting is getting very creative," Roberts told me at the time. "When that happens it's usually a sign the end is near."

Not surprisingly, at least one analyst is chatting up the possibility that private equity does a deal to take the company private. (To me, that's often a sign of vulnerability as Wall Street tries to keep a stock elevated) Others have mentioned that RealPage, with its stock clobbered, could become a sitting duck to get acquired. The question, of course, at what price? And how likely?

Roberts isn't impressed, especially with the private-equity possibility. "Private equity buys when there is free cash flow to pay for the debt. Free cash, cash from operations minus capex, was $36 million for the year and $6.5 million for the quarter. It appears that it will decline. What will PE guys pay for that cash flow? There are 80 million shares outstanding. At $15 that is a market cap of $1.2 billion. Even if PE paid 20-times free-cash flow that is $720MM, or less than $10 a share." Which is why red flags continue to fly.

-- Written by Herb Greenberg in San Diego

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Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security. He can be reached at