Critical Review: FalconStor Software (OTCMKTS:FALC) versus Appian (NASDAQ:APPN)

FalconStor Software (OTCMKTS:FALCGet Rating) and Appian (NASDAQ:APPNGet Rating) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Risk and Volatility

FalconStor Software has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500. Comparatively, Appian has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500.

Profitability

This table compares FalconStor Software and Appian’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FalconStor Software -16.10% -14.85% -12.32%
Appian -29.34% -37.92% -18.52%

Valuation and Earnings

This table compares FalconStor Software and Appian’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FalconStor Software $14.18 million 0.57 $200,000.00 ($0.44) -2.59
Appian $369.26 million 10.01 -$88.64 million ($1.72) -29.69

FalconStor Software has higher earnings, but lower revenue than Appian. Appian is trading at a lower price-to-earnings ratio than FalconStor Software, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for FalconStor Software and Appian, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FalconStor Software 0 0 0 0 N/A
Appian 1 1 4 0 2.50

Appian has a consensus price target of $78.33, suggesting a potential upside of 53.38%. Given Appian’s higher probable upside, analysts clearly believe Appian is more favorable than FalconStor Software.

Institutional & Insider Ownership

2.5% of FalconStor Software shares are held by institutional investors. Comparatively, 80.5% of Appian shares are held by institutional investors. 52.7% of FalconStor Software shares are held by insiders. Comparatively, 43.9% of Appian shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

FalconStor Software beats Appian on 7 of the 12 factors compared between the two stocks.

About FalconStor Software

(Get Rating)

FalconStor Software, Inc., a storage software company, enables enterprise customers and managed service providers to secure, migrate, and protect their data worldwide. The company offers FalconStor Virtual Tape Library, a software that emulates and replaces cumbersome legacy physical tape libraries for archive related data preservation without being forced to replace their enterprise backup and archive software and associated processes; FalconStor StorSafe, a long-term archive data management software; FalconStor Continuous Data Protector delivers instant data availability, and reliable recovery; and FalconStor Network Storage Server for data storage virtualization and business continuity in heterogeneous environments. It also provides FalconStor StorSigh, a long-term archive and business continuity driven data replication from one centralized management point; FalconStor RecoverTrac Disaster Recovery Technology that streamlines the implementation, testing, and execution of disaster recovery operations; and FalconStor MicroScanTM Technology, which minimizes the amount of data transferred during replication by eliminating inefficiencies at the application and file system layer. The company sells its products through authorized partners, value-added resellers, solution providers, system integrators, direct market resellers, distributors, managed service providers, cloud service providers, and original equipment manufacturers, as well as directly to customers. FalconStor Software, Inc. was incorporated in 1994 and is headquartered in Austin, Texas.

About Appian

(Get Rating)

Appian Corporation provides low-code automation platform in the United States and internationally. The company's platform automates the creation of forms, workflows, data structures, reports, user interfaces, and other software elements that are needed to be manually coded. The company also offers professional and customer support services. It serves to financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation industries. The company was incorporated in 1999 and is headquartered in McLean, Virginia.

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