Shares of Appian (NASDAQ:APPN) slipped roughly 8.1% in today's trading, according to data from S&P Global Market Intelligence. There wasn't any major business-specific news behind the move, but the low-code software specialist's stock got hit hard amid a pullback for growth-oriented tech stocks.
Technology stocks sold off in the lead-up to earnings releases from major industry players including Microsoft, Alphabet, and Apple. The tech-heavy Nasdaq Composite index closed the day down roughly 1.2%, and Appian was a casualty of market momentum.
Appian stock has pulled back after posting huge gains in 2020. The company's share price skyrocketed roughly 295% last year thanks to surging demand for its low-code software solutions and a favorable market backdrop for growth-focused tech stocks, but it's seen volatile trading in 2021. The software specialist has a highly growth-dependent valuation, and its business outlook remains somewhat speculative, so it's not surprising to see the stock post outsize moves in conjunction with momentum for the broader market.
Appian now has a market capitalization of roughly $8.1 billion and trades at approximately 23 times this year's expected sales. I own the stock in my portfolio and continue to like the company's prospects.
Appian's services make it easy for enterprise customers to build and quickly deploy new software applications. Its low-code development platform could continue to enjoy demand tailwinds as businesses carry out digital transformations and become increasingly reliant on technology. However, the stock remains a risky play by most conventional standards, and it's probably not a great fit for investors who are unwilling to embrace the potential for more volatility in the near term.