Bull Of The Day: Appian (APPN)

Appian (APPN) is a Zacks Rank #1 (Strong Buy) that has a D for Value and a B for Growth. This company is focused on enabling customers with mobile applications.  All software stocks have been hit hard on the idea that AI is going to take most of their customers, but the reality may be far from that.  While there may be more competition, businesses that value reliability will still use proven resources instead of brand new lower cost solutions. Let’s learn more about why this stock is the Bull of the Day.

Description                                              

Appian Corp. engages in the provision of business process management (BPM) solutions. Its products include BPM software, case management, mobile application development, and platform-as-a-service. The company was founded by Matthew Wheeler Calkins, Robert Charles Kramer, Marc Wilson, and Michael Beckley in 1999 and is headquartered in McLean, VA.

Earnings History                                                                                                                                                 

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

Appian (APPN) has reported four straight beats of the Zacks Consensus Estimate.  Over the course of the last year, the average positive earnings surprise works out to be 260%.

The company recently reported a gain of 15 cents when the Zacks Consensus Estimate was calling for 9 cents and that 6 cent beat translates to a positive earnings surprise of 67%.

Earnings Estimates Revisions

Earnings estimate revisions is what the Zacks Rank is all about. 

Estimates for 2026 are moving up forAppian (APPN).

The current fiscal year 2026 has increased from $0.86 to $0.89 over the last 60 days.

Fiscal 2027 has increased from $1.12 to $1.15 over the last 60 days.

Valuation                                                                                                        

I see a 24.6x forward earnings multiple which is a little rich for a 10%-11% grower, but the earnings growth is the story here. Earnings are expected to grow 46% this year and 29% next year.  The price to book is an NA and the price to sales comes in at 2.2x. 

Consistent revenue growth and strong earnings growth means that margins are increasing.  Right now the operation margin is very low, in fact two quarters ago it was negative and last quarter it flipped to positive.  Both margins levels were less than 1% (less than negative 1% and less than positive 1%).  That will be changing and should lead to multiple expansion.

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This article originally published on Zacks Investment Research (zacks.com).

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Source Zacks-com