What happened
It's been a brutal year for Appian (APPN -0.89%) shareholders. After skyrocketing in value in 2020, the stock backtracked in 2021 and lost nearly 60% of its value. The slide has continued the first couple weeks of 2022 as high-growth stocks remain under pressure. But today, Appian is getting a bit of a relief rally. The stock is up 6.2% as of 12:55 p.m. ET.
So what
Like other high-growth tech stocks, Appian has been suffering as of late because of the threat of higher interest rates. The Federal Reserve has indicated a few short-term interest rate hikes are likely in order this year to try to beat back inflation. Higher rates lower the present value of stocks, especially those like Appian that are growing fast but are not yet profitable.
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Now what
There's a lot of downward pressure on Appian at the moment, and even after another big sell-off, it isn't exactly a cheap stock. Shares currently trade for 13 times expected 2021 sales.
Nevertheless, Appian's low-code software development platform is still growing at a healthy clip, and the company added some important elements to its capabilities in the last year. It acquired small process mining outfit Lana Labs last summer, adding an important feature to its robotic process automation (RPA, which helps companies automate redundant tasks) software. Recently, tech researcher Forrester named Appian a leader in digital process automation, ranking its offering in tight competition with the likes of International Business Machines and Microsoft.
Appian's top brass said to expect cloud-based subscription revenue to grow as much as 33% year over year in the fourth quarter, and total revenue to grow as much as 17% year over year. Appian will provide a quarterly update in February. Though its stock trades for a premium, this company's future prospects remain rosy.
