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Bear Of The Day: Appian (AAPN)

Brian Bolan
·2-min read

Appian (APPN) is a Zacks Rank #5 (Strong Sell) following an earnings miss back in November. The stock was trading just over $100 before the print, but it has tumbled down to the $55 level. Let’s take a deeper look at this stock in this Bear of the Day article.

Description

Appian Corporation provides low-code software development platform which enables organizations to develop various applications primarily in the United States and internationally. The Company's products include business process management software, case management, mobile application development and platform as a service. It serves financial services, healthcare, government, telecommunications, media, energy, manufacturing and transportation organizations. Appian Corporation is headquartered in Reston, Virginia..

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.

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In the case of APPN, I see one miss followed by three straight beats of the Zacks Consensus Estimate over the last year. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.

The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For GDS I see estimates moving lower.

This quarter has fallen from -$0.21 to -$0.23.

Next quarter dropped from -$0.17 to -$0.19.

The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is mixed for those numbers.

The current year 2021 consensus number has dropped 2 cents to a loss of $0.75.

The next year has dropped from a loss of $0.76 to a loss of $0.84 over the last 60 days.

Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).

It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).

Chart

Appian Corporation Price and Consensus

Appian Corporation Price and Consensus
Appian Corporation Price and Consensus

Appian Corporation price-consensus-chart | Appian Corporation Quote


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