Please ensure Javascript is enabled for purposes of website accessibility

Why Appian Stock Skyrocketed 324% in 2020

By Chris Neiger - Updated Jan 8, 2021 at 3:41PM

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

The company tapped into an increasing demand for apps.

What happened

Shares of Appian (APPN -0.44%) spiked 324% last year, according to data provided by S&P Global Market Intelligence, as investors looked to technology stocks as a haven for their money during lockdowns and social distancing. 

So what 

Appian's platform allows customers to easily and quickly build apps without having to know much about writing code. And as the pandemic forced companies to focus their attention on attracting and communicating with customers online, many companies turned to Appian to build their apps last year. 

Several arrows pointing up on a dark blue background.

Image source: Getty Images.

The demand for an easy app-building service pushed up Appian's cloud subscription revenue, which increased 40% in the third quarter. In turn, the company's total revenue increased 17% in the quarter to $70.9 million, and adjusted earnings per share reached breakeven, outpacing Wall Street's consensus estimate for a loss of $0.17 per share. 

Appian's growth in the third quarter, and its revenue and earnings beat, spurred investor sentiment in the stock and caused its share price to jump 121% in November.

Investors were also likely optimistic about the company as demand for mobile apps increases. The mobile app market was worth $106 billion in 2018 and could grow to an estimated $407 billion by 2026. 

Now what 

Appian's management has issued guidance for the full-year 2020, with cloud subscription revenue estimated to increase 34% to about $127.5 million. And it said on the third-quarter earnings call that 2020 sales will be $296.5 million at the midpoint of guidance, which would be an 11% year-over-year increase.

If the company continues to build its cloud subscription sales, and tap further into the demand for mobile apps, Appian could continue to see growth in the new year.

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
$51.77 (-0.44%) $0.23

*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 service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/18/2022.

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.