When Will Appian Corporation (NASDAQ:APPN) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at Appian Corporation's (NASDAQ:APPN) future prospects. Appian Corporation, a software company that provides low-code design platform in the United States, Mexico, Portugal, and internationally. On 31 December 2023, the US$2.6b market-cap company posted a loss of US$111m for its most recent financial year. Many investors are wondering about the rate at which Appian will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Appian

Appian is bordering on breakeven, according to the 10 American Software analysts. They expect the company to post a final loss in 2025, before turning a profit of US$699m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 46%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Underlying developments driving Appian's growth isn’t the focus of this broad overview, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Appian currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Appian to cover in one brief article, but the key fundamentals for the company can all be found in one place – Appian's company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Valuation: What is Appian worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Appian is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Appian’s board and the CEO’s background.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.