Appian: Courts Overturn $2 Billion Trade Secret Misappropriation Judgement From 2022

We are maintaining our $38 per share fair value estimate and Very High Morningstar Uncertainty Rating for no-moat Appian after a Virginia court overturned the 2022 misappropriation judgment against Pegasystems. Appian was previously awarded $2 billion in a case involving misappropriation of trade secrets; however, a Virginia court of appeals determined that errors were made in the original ruling that required the case to be retried. We had not included the forecast net settlement of $790 million into our base-case valuation scenario, and therefore we maintained our fair value estimate in light of this decision. Appian intends to appeal the overturned decision and reinstate the judgment against Pegasystems.