Why Appian Corp Stock Fell Monday

What happened

Shares of low-code software development platform Appian (NASDAQ: APPN) fell as much as 17.5% on Monday, following a downgraded rating for the stock by an analyst at Barclays (via StreetInsider.com).

Barclays analyst Raimo Lenschow downgraded the stock from equalweight to underweight, or a rating in which an analyst believes a stock has a below-average chance of performing in line with stock market indices. His lower rating for the stock reflects valuations concerns.

So what

Appian is "the most expensive" stock among those he covers, Lenschow said. Lenschow noted that aggressive buying of Appian stock by active investor Abdiel Capital has driven the price to a level beyond the stock's intrinsic value.

The stock is up 74% since Dec. 15, 2017, trading at $36.35. Lenschow has a 12-month price target for the stock of $26, or nearly 28% below current levels.

Now what

Lenschow seems to be bullish on Appian's underlying business, commenting on the strong market opportunity for low-code software and management's "healthy execution." Appian's total revenue rose 45% year over year in the company's most recent quarter, supporting Lenschow's bullish view on the underlying business.

But investors may want to consider whether Appian's valuation has gotten ahead of itself.

Find out why Appian is one of the 10 best stocks to buy now

Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. (In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the market!*)

Tom and David just revealed their ten top stock picks for investors to buy right now. Appian is on the list -- but there are nine others you may be overlooking.

Click here to get access to the full list!

*Stock Advisor returns as of January 2, 2018

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Appian. The Motley Fool recommends Barclays. The Motley Fool has a disclosure policy.