What Happened:
Shares of low code software development platform provider Appian (Nasdaq: APPN) jumped 10.5% in the morning session after the company announced that three of its partners (Carahsoft Technology Corp., Groundswell, and TD Synnex Public Sector) secured a multiple-award contract valued at $145 million for its (APPN's) products through the Department of Defense Enterprise Software Initiative.
Through the contract, the U.S. Navy will benefit from Appian's commercial off-the-shelf (COTS) software, hardware, and maintenance support for five years. Overall, the contract highlights Appian's strength and relevance in the Fed vertical and is expected to be accretive to its revenue. After the initial pop the shares cooled down to $30.96, up 3% from previous close.
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What is the market telling us:
Appian’s shares are very volatile and over the last year have had 20 moves greater than 5%. But moves this big are very rare even for Appian and that is indicating to us that this news had a significant impact on the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago, when the stock dropped 23.1% on the news that the company reported first-quarter results with revenue guidance for the next quarter, missing analysts' expectations, while full-year revenue guidance was roughly in line. While revenue beat slightly, billings (often analyzed in addition to revenue because it's cash in the door rather than recognized revenue dictated by accounting rules) missed Wall Street's estimates. Overall, this was a weaker quarter for Appian.
Appian is down 12.1% since the beginning of the year, and at $30.96 per share it is trading 38.1% below its 52-week high of $50.03 from September 2023. Investors who bought $1,000 worth of Appian’s shares 5 years ago would now be looking at an investment worth $643.34.
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