Appian is down 11% after earnings numbers as the outlook is disappointing

Matt Calkins, CEO of Appian.

Appian’s shares fell a whopping 11% on Friday before losing. The low-code cloud services company has released its fourth quarter and full year 2020 profit report Thursday and gave a muted outlook.

The company said its cloud subscription business will see revenue growth of 30% to 31%, which would mean a year-over-year decline from last year’s 36% expansion.

The company also said it expects a non-GAAP loss per share of between $ 0.64 and $ 0.60 for the 2021 fiscal year on revenues of between $ 353 million and $ 355 million.

Goldman analysts, led by Christopher D. Merwin, CFA, said Appian had delivered “another strong quarter” on Thursday as low-code adoption continues to pave the way for “30% sustainable growth.”

However, they also reiterated their “neutral” rating on Appian, giving a price target of $ 180 for the company due to its high valuation – Appian is currently trading at approximately 47 times its 12-month sale.

Merwin and the company said they “believe APPN deserves a terminal value that is in line with other 30% + growers in our coverage,” but no higher. Goldman’s target price represents a potential 15% decline in stock prices from current levels.

McLean, Virginia-based Appian has seen its shares rise by more than 40% in 2021 amid a boom for cloud computing companies and low-code platforms in particular.

According to data from GartnerCompanies are increasingly using low-code platforms for improved scalability and flexibility, and the low-code market is expected to total $ 11.3 billion by 2021, up 23% year-on-year.

In addition, one study from Research and Markets found that the low-code market could be worth $ 187 billion by 2030.

In a statement to Insider, Matt Calkins, Appian’s CEO and founder, said he was “feeling good about the quarter and full year,” despite the stock declining after earnings.

The CEO added, “This is a moment of great change and great opportunities for low-code technology – and Appian is the pioneer in the midst of it. The technology is here and will remain and will continue to change the future of work. ”

Still, the booming low-code industry wasn’t enough to make Appian profitable. The company reported a GAAP operating loss of $ 9.7 million on revenue of $ 81.6 million in the fourth quarter. And as discussed, the guidelines showed that Appian expects to continue struggling to turn a profit in 2021.

Despite the lack of profitability, Goldman viewed the quarter as a net positive due to an “increasing demand environment, growing partner ecosystem, and improved sales cycles.”

Matt Calkins was also unconcerned about the losses and instead focused on increasing the cloud subscription and low-code revenue in the revenue teleconference

“Throughout the year, we exceeded our expectations, growing cloud subscription revenues by 36% to $ 129.2 million. Appian leads this market because our low-code platform is more than 10x faster, our partner ecosystem is growing, and our customers are satisfied. , ”said the CEO.

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