Please ensure Javascript is enabled for purposes of website accessibility

Why Appian Corp Stock Fell Monday

By Daniel Sparks - Jan 8, 2018 at 3:10PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

What do you think of this analyst's take on Appian stock?

What happened

Shares of low-code software development platform Appian (APPN 0.38%) fell as much as 17.5% on Monday, following a downgraded rating for the stock by an analyst at Barclays (via StreetInsider.com).

Barclays analyst Raimo Lenschow downgraded the stock from equalweight to underweight, or a rating in which an analyst believes a stock has a below-average chance of performing in line with stock market indices. His lower rating for the stock reflects valuations concerns.

A chalkboard sketch of a downward trending chart.

Image source: Getty Images.

So what

Appian is "the most expensive" stock among those he covers, Lenschow said. Lenschow noted that aggressive buying of Appian stock by active investor Abdiel Capital has driven the price to a level beyond the stock's intrinsic value.

The stock is up 74% since Dec. 15, 2017, trading at $36.35. Lenschow has a 12-month price target for the stock of $26, or nearly 28% below current levels.

Now what

Lenschow seems to be bullish on Appian's underlying business, commenting on the strong market opportunity for low-code software and management's "healthy execution." Appian's total revenue rose 45% year over year in the company's most recent quarter, supporting Lenschow's bullish view on the underlying business.

But investors may want to consider whether Appian's valuation has gotten ahead of itself.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Appian Stock Quote
Appian
APPN
$55.25 (0.38%) $0.21
Barclays PLC Stock Quote
Barclays PLC
BARC
$158.64 (-0.19%) $0.30

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.