Citi raises Appian stock price target to $41, maintains Buy rating

On Tuesday, Citi analyst Steven Enders increased the price target for Appian Corp . (NASDAQ: NASDAQ:APPN) to $41, up from $40, while keeping a Buy rating on the shares. Currently trading at $32.85, with a market capitalization of $2.44 billion, Appian has shown strong momentum with a 5.22% return over the past week. The adjustment follows Appian’s first-quarter results, which surpassed expectations with a slight top-line outperformance and a significant EBITDA beat. According to InvestingPro data, the company maintains impressive gross profit margins of 76.37%.

Appian reported a 1.9% beat on top-line revenue expectations and a 1.4% beat in cloud revenue, contributing to a solid revenue growth of 13.15% over the last twelve months. The company’s EBITDA exceeded forecasts by $7.6 million, contributing to the raised and widened full-year guidance. While not currently profitable, InvestingPro analysts predict profitability this year, with an EPS forecast of $0.20 for 2025. Management highlighted that they have not observed any macroeconomic impacts on their sales pipeline or cycles, including the federal business segment, which accounts for approximately 24% of Q1 revenue. This segment experienced strong bookings growth of 59% year-over-year.

The company’s federal business had an exceptionally strong quarter in bookings, showing a 59% increase compared to the same period last year. Management has cautiously optimistic expectations for the rest of the year, given these robust results. With a beta of 1.84, investors should note the stock’s higher volatility compared to the market. Additionally, Appian’s efforts in AI monetization appear to be progressing well, with the new Advanced tier, which offers a 25% price uplift, contributing $9 million in revenue for the quarter. For deeper insights into Appian’s financial health and growth potential, access the comprehensive Pro Research Report available exclusively on InvestingPro, covering 1,400+ top US stocks. This represents 5% of the total revenue despite being in the early stages of the back-to-base upgrade cycle.

Enders underscored the positive outlook for the federal sector and the advancements in AI monetization as key factors that support the value proposition of Appian’s stock. He also noted the potential for margin improvement. In his analysis, Enders sees value in Appian’s shares at 3.0 times the projected 2026 enterprise value to subscription revenue, including the present value of insurance.

In other recent news, Appian Corp reported its Q1 2025 earnings, revealing a slight miss on earnings per share with a loss of $0.02 against a forecasted gain of $0.01. Despite this, Appian’s revenue reached $166.4 million, surpassing expectations and marking an 11% increase year-over-year. The company’s cloud subscription revenue grew by 15% to $99.8 million, with AI-driven cloud services being a significant contributor to this growth. Appian’s adjusted EBITDA showed a substantial improvement, reaching $16.8 million from a loss of $1.3 million in Q1 2024. The company also introduced new AI-inclusive pricing tiers, which have already doubled revenue from these tiers to $9 million in Q1. Looking ahead, Appian projects its cloud subscription revenue to be between $419 million and $423 million for the full year 2025. The company remains cautiously optimistic about federal government spending, a significant sector for its business, with bookings in this area growing by 59%. Additionally, Appian’s executive team will see a new addition with Serge Tanga joining as the Chief Financial Officer later this month.

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