We liked Appian (NASDAQ:APPN), offering low code platform enabling clients to quickly build and host apps back in July 2018 (with the shares up 25%+ since), and we still like it for many of the same reasons.
Appian seems one of these essential business software companies that really helps customers to solve otherwise pretty intractable problems, basically offering no-brainer services.
In this respect, it's very much like two companies we recently wrote about, Yext (YEXT) and Tufin (TUFN). The particular service that Appian offers is a low code way to design and run applications that offer workflow automation for customers.
There are a number of terrific examples of that in the Q4CC and the company has used the pandemic to showcase the speed and comprehensiveness of its solutions.
However, the shares are fairly fully valued given that the company is still some time away from profitability (cash is not a problem) and growth is slowing down at least a little, so while we still very much like the company, ideally we would like the shares to come down a little.
This can be engineered through purchasing out of the money put options, or otherwise one could buy in batches as we still think the company is a long-term winner.
Low code process digitalization
The essence is in the 'low code' part as this brings a triple benefit:
- It's its core competence and the source of its competitive differentiation and strength.
- It enables building apps much faster and in a more flexible way.
- It ties customers to their software, hence the SaaS format, either on premise or (increasingly) in the cloud.
The Q4CC is full of examples of the second, where customers were sold on the speed and flexibility of the company's solutions, just for illustrative purposes, describing a sales win of a
