Appian Gains 7% in the Past 6 Months: Should You Buy the Stock?

Appian APPN shares have gained 6.6% in the trailing six months compared with the broader Zacks Computer and Technology sector’s return of 6.5%.The company has also outperformed its Internet - Software industry peers, including Arlo Technologies ARLO and Bumble BMBL. Shares of ARLO and BMBL have lost 12.1% and 15.5%, respectively, over the trailing six-month period.The outperformance can be attributed to strong cloud subscription revenue growth, high customer retention, increased adoption of AI-driven solutions, and expanded deals in both the public and financial sectors.In the third quarter of 2024, Appian saw a 22% year-over-year increase in cloud subscription revenues, reaching $94.1 million. This highlights the growing demand for cloud-based solutions and reflects the company’s successful transition toward a cloud-first business model.Appian Corporation Price and Consensus Appian Corporation price-consensus-chart | Appian Corporation QuoteThe cloud subscription gross renewal rate remained extremely strong at 99%, up from 97% in the previous year. This indicates robust customer retention and satisfaction with Appian’s cloud offerings.APPN Boosts Growth With AI-Driven SolutionsAPPN’s increased adoption of AI-driven solutions and strong growth in cloud subscription revenues have been major growth drivers.In the third quarter of 2024, APPN launched a major update to its Appian Platform, enhancing AI capabilities with AI Copilot and AI Skills to streamline data and process automation, introduce AI-driven insights, support compliance with HITRUST certification, and expand AI features globally across various regions.Appian also announced the integration of ProcureSight with Appian Requirements Management, leveraging generative AI and semantic search to streamline the government procurement process. This integration enables faster and more accurate requirements package creation, showcasing Appian’s ability to apply AI in diverse sectors for efficiency.In October, Appian announced that Acclaim Autism, a leading multi-state behavioral healthcare company, is using its private AI capabilities to streamline and accelerate patient onboarding, reducing intake wait times by more than 80%.Expanding Clientele Benefits APPNAppian’s pipeline showed larger median deal sizes, indicating that customers are increasingly willing to invest in the platform. In the third quarter of 2024, Appian signed several notable deals, including with a top Latin American bank and a federal U.S. agency. The high-quality deals and the expansion into new verticals like government and financial services have been noteworthy.In October, Appian expanded its partnership with the US Army under the Foreign Military Sales Army Case Execution System contract, modernizing the Army’s case management platform with the Appian Platform and Amazon’s AMZN cloud computing platform Amazon Web Services.APPN has also signed a Strategic Collaboration Agreement with Amazon Web Services to integrate generative AI and machine learning into its low-code platform, enhancing business process automation while ensuring data security and privacy.APPN Earnings Estimates Show Upward MovementAppian is benefiting from expanding clientele and solid growth, particularly in its cloud and subscription businesses, which are driven by AI integration and sector expansion. For the fourth quarter of 2024, Appian projects cloud subscription revenues between $95 million and $97 million, representing growth of 14% to 17%.Revenues for fourth-quarter 2024 are expected to be between $163.5 million and $165.5 million, representing a year-over-year increase of 13% to 14%. Non-GAAP net loss per share is expected to be between $(0.03) and breakeven.The Zacks Consensus Estimate for fourth-quarter 2024 revenues is currently pegged at $164.11 million, suggesting 12.93% growth year over year.The consensus mark for loss is pegged at 1 cent per share, which remained unchanged over the past 30 days. Find the latest EPS estimates and surprises on Zacks Earnings Calendar.What Should Investors Do With APPN Stock?Appian’s continued growth in cloud subscription revenue, strategic AI integration, and expanding market presence, particularly in the public sector and financial services, is expected to have been a tailwind for APPN.Appian currently sports a Zacks Rank #1 (Strong Buy) which implies that investors should start accumulating the stock right now. 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