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On Wednesday, Morgan Stanley (NYSE:MS) updated its outlook on Appian Corp . (NASDAQ:APPN) by raising the price target to $35.00, up from the previous $32.00, while maintaining an Equal-weight rating on the shares. Currently trading at $37.64, Appian’s stock price sits within the broader analyst target range of $32-$53. The firm’s analysts noted that the company surpassed all metrics in Q4, with the FY25 revenue guidance encompassing the consensus expectations. According to InvestingPro data, the company maintains a healthy gross profit margin of 75.28% despite challenging market conditions.
The analysts observed that despite the overall positive results, growth trends in the cloud segment are showing signs of deceleration. This slowdown, however, is being counterbalanced by a significant improvement in profitability. InvestingPro analysis reveals that while the company achieved 13.28% revenue growth in the last twelve months, analysts don’t expect profitability this year - one of several key insights available in the comprehensive Pro Research Report. The commentary from Morgan Stanley highlighted that the discussions around Appian’s positioning in artificial intelligence (AI) and its exposure to federal clients remain pivotal.
The revision in the price target comes after Appian reported quarterly figures that exceeded estimates. The firm’s analysts are taking a cautious stance, opting to wait for signs of better growth before altering their rating. They emphasized the importance of AI and federal exposure as key areas of debate when considering the company’s future performance.
Appian’s stock price target adjustment reflects Morgan Stanley’s analysis of the company’s latest financial results and market position. The firm’s stance remains neutral with an Equal-weight rating, indicating that the analysts believe the stock is valued appropriately relative to its peers.
The company’s financial performance, particularly in terms of profitability, has been recognized as a strong point, even as concerns about slowing growth in certain segments persist. Morgan Stanley’s updated price target suggests a modest optimism about Appian’s capacity to navigate the current market dynamics.
In other recent news, Appian Corporation reported strong fourth-quarter earnings, with earnings per share (EPS) of $0.00, surpassing analyst expectations by $0.01. The company’s revenue for the quarter reached $166.7 million, exceeding the consensus estimate of $164.36 million and marking a 15% increase from the previous year. Appian’s guidance for the first quarter of 2025 predicts EPS between $0.02 and $0.05, significantly higher than the expected $0.39 loss, with revenue projected between $162 million and $164 million. For the full fiscal year 2025, the company anticipates EPS between $0.17 and $0.22, compared to a consensus estimate of $0.12, and revenue guidance closely aligning with the consensus estimate of $682.8 million.
In terms of subscriptions, Appian reported a 19% year-over-year increase in cloud subscription revenue, amounting to $98.9 million in the fourth quarter. Total (EPA:TTEF) subscription revenue rose by 18% to $136.8 million, while professional services revenue increased slightly to $29.9 million. For the full year of 2024, cloud subscription revenue grew by 21% to $368.0 million, and total subscriptions revenue was up 19% to $490.6 million. Additionally, Appian’s adjusted EBITDA for the fourth quarter was $21.2 million, a significant improvement from the previous year’s $1.0 million.
Analysts have shown mixed reactions to Appian’s financial results. TD Cowen noted that while the first-quarter guidance was below expectations, the full-year guidance was in line and possibly better than anticipated. Meanwhile, KeyBanc initiated coverage of Appian with a Sector Weight rating, citing positive developments in pricing and packaging but expressing concerns about long-term growth and recent leadership changes. KeyBanc’s neutral stance suggests that Appian’s stock is expected to perform in line with industry peers over the next year.
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