Appian Posts Smaller-Than-Feared 4Q Loss; Shares Drop 6%

Appian Corp. delivered better-than-expected performance in the fourth quarter as the low-code automation platform provider saw an increase in demand for its cloud services.

Meanwhile, shares of Appian Corp. (APPN) fell 6% on Feb. 19 after ballooning 280% over the past six months. The company posted a net loss per share of $0.03 during the fourth quarter, which was smaller than the loss per share of $0.17 expected by analysts.

Revenue increased 19% year-on-year to $81.63 million topping analysts’ estimates of $73.96 million. The increase in 4Q revenues was attributable to a 40% increase in cloud subscription revenue and a 33% rise in total subscriptions revenue which includes SaaS subscriptions, license subscriptions and maintenance and support.

For fiscal 2020, the company generated sales of $304.6 million, up from the $260 million posted in 2019. Net loss per share came in at $0.26 versus the net loss per share of $0.52 in the comparable year-ago period.

Appian Founder and CEO Matt Calkins said, “Low-code emerged in 2020 as a successful way for organizations to remain nimble in the face of change, Appian is leading this market because our low-code platform is more than 10x faster and our partner ecosystem is growing.”

Looking ahead to 1Q, on the back of a strong cloud subscription growth, Appian sees total sales land between $81.7 million to $82.7 million on a net loss per share of between $0.15 and $0.13.

For fiscal 2021, the company expects total revenue to be in the range of $353 million and $355 million on a net loss per share of $0.64 to $0.60. (See Appian stock analysis on TipRanks)

On Feb. 19 Truist Financial analyst Terry Tillman raised Appian’s price target to $205 from $95 but reiterated a Hold rating. Tillman noted, Appian’s 4Q margins were “very strong” but possibly temporarily inflated and after a significant revaluation in the stock and less attractive risk/reward profile, a neutral stance is warranted.

The rest of the Street has a Hold consensus rating on the stock based on 1 Buy, 2 Holds and 2 Sells. The average analyst price target of $159.20 implies about 22% downside from current levels.

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