APPN
Appian Corporation
$26.05
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 40.9% below fair value
You pay
$26.05
Bear
$20.78
Fair
$44.06
Bull
$70.78
Bear
$20.78
-20.2%
12% rev growth, 17% terminal margin
Fair
$44.06
+69.1%
21% rev growth, 23% terminal margin
Bull
$70.78
+171.7%
27% rev growth, 26% terminal margin
Key Value Driver
Revenue growth (21%) × margin expansion to 23%
Terminal Value % of EV
62%
Implied Market Multiple
2.9x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $27.75 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $44.06 per share.
Warnings
Wall Street's average price target is $27.75 (from 19 analysts). Our estimate is 78% above the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep