Morgan Stanley analyst Sanjit Singh maintained a Hold rating on Appian (APPN – Research Report) today and set a price target of $35.00.
Sanjit Singh has given his Hold rating due to a combination of factors impacting Appian’s current and future performance. One of the primary considerations is the company’s significant exposure to the U.S. federal sector, which comprises 20-25% of its revenue. While there are concerns about potential impacts from federal layoffs, Appian’s management believes the business is relatively insulated due to the critical nature of their offerings and their unique pricing model. This model, which charges per application rather than per seat, reduces the risk of substantial revenue loss.
Additionally, Appian’s strategic focus on partner engagement has shown promising results, with a 60% increase in their partner-sourced pipeline last year. However, the company is still navigating uncertainties, such as the ongoing lawsuit against Pegasystems and the ongoing search for a new CFO. These factors contribute to a cautious outlook, justifying the Hold rating as investors await further developments in these areas.
In another report released today, TD Cowen also maintained a Hold rating on the stock with a $43.00 price target.