Appian, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Derrick Wood from TD Cowen maintained a Hold rating on the stock and has a $35.00 price target.
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Derrick Wood’s rating is based on a combination of factors including Appian’s recent financial performance and market conditions. The company reported a cloud growth of 18%, which exceeded expectations and was driven by strong performance in large deals and favorable foreign exchange impacts. However, there are concerns about the net revenue retention (NRR) rate, which decreased by one point to 111%, and management has removed its long-term targets of 110-120% due to ongoing downsell pressures and a shift in their go-to-market strategy.
Additionally, while there are positive signs such as stable federal demand and early traction in AI engagements, the path to monetizing AI offerings remains uncertain, with gradual shifts in pricing strategies. The valuation of Appian is near trough levels, but the direction of NRR could impact future cloud growth, and growth-at-a-reasonable-price (GARP) investors may seek higher margins. Given these mixed signals, Derrick Wood has maintained a Hold rating with a revised price target of $35.
Based on the recent corporate insider activity of 60 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of APPN in relation to earlier this year.