Appian, a cloud computing specialist (NASDAQ: APPN), saw a sharp decline in its shares in the bear market of 2022, much like the rest of the software sector. The stock had reached a high valuation in early 2021 due to a short squeeze, but ultimately this was not sustainable. Despite solid growth during a broader tech sector slowdown, the company’s shares have fallen by 84% since their peak in early 2021.
However, Appian’s shares jumped over 12% on its fourth-quarter earnings report, which delivered strong results on the top and bottom lines. The company also discussed new initiatives in artificial intelligence (AI) and “data fabric.”
Appian reported cloud revenue growth of 26% to $83.1 million in the fourth quarter, driving overall revenue up 16% to $145.3 million. It also reported a surprise adjusted profit per share of $0.06, better than the consensus estimate of a $0.24 loss.
Appian has focused on a technology called low-code data, which is a simple way to connect to data from different sources. The company’s data fabric doesn’t house its customers’ data, instead acting as a “virtual database.” This data fabric is a key part of Appian’s AI strategy.
The company’s recent earnings call highlighted their expectation that these features will drive revenue differentiation.
What about Appian stock as an investment?
Appian’s improvement on the bottom line in the last quarter was impressive, posting an adjusted profit. The company also expects an adjusted EBITDA profit in 2024 after an EBITDA profit of $1 million in the fourth quarter. It’s set to hold an Investor Day conference in April, which is expected to provide updates on AI and data fabric. If Appian can leverage its AI products into meaningful revenue growth, the potential upside for the stock looks significant.
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