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Can You Imagine How Appian's (NASDAQ:APPN) Shareholders Feel About The 41% Share Price Increase?

Simply Wall St

While Appian Corporation (NASDAQ:APPN) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 20% in the last quarter. But that doesn't change the reality that over twelve months the stock has done really well. In that time we've seen the stock easily surpass the market return, with a gain of 41%.

See our latest analysis for Appian

Given that Appian didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Appian saw its revenue grow by 18%. That's a fairly respectable growth rate. Buyers pushed the share price 41% in response, which isn't unreasonable. If the company can maintain the revenue growth, the share price could go higher still. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

NasdaqGM:APPN Income Statement, December 30th 2019

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for Appian in this interactive graph of future profit estimates.

A Different Perspective

Appian shareholders should be happy with the total gain of 41% over the last twelve months. We regret to report that the share price is down 20% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

But note: Appian may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.