Appian Earnings: Go-To-Market Restructure and Near-Term Revenue Headwinds Spook Investors

No-moat Appian reported reasonable second-quarter 2024 results, meeting our top-line forecasts and surpassing our and FactSet's consensus profitability estimates. However, the firm issued mixed near-term guidance following a go-to-market restructure and headcount reductions, including accelerated profitability but a cut to top-line growth assumptions. Following the result, we have adjusted our forecasts to align with updated guidance and lowered our fair value estimate to $35 from $38. Our valuation now includes a projected probability-weighted cash inflow associated with the trade secret misappropriation case against Pegasystems and the associated judgment preservation insurance policy.