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APX - Appen Limited

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APX has certainly been one of the best performers in the ASX since it was listed.
I worry about how much higher can it go, but traders shouldn't worry about that.
There's an interesting BO-NH setup on the daily chart.

 
Anyone still following Appen? I have been quietly holding and accumulating this stock.

Artificial Intelligence seems to be one of those high growth sectors of the future for tech companies such as google, amazon, apple etc. Most of these major companies being clients of Appen. You can see it already how AI will be disrupting almost every sector with products like Amazon's Alexa, Google home, voice recognition on all smart phones and vehicles. Apartments, Hotels and houses are increasingly been configured to work with voice recognition and control.

Only problem with these super high growth stocks is that if they don't meet guidance or analyst expectations, expect the stock to be hammered. Current guidance for FY18 is the upper end of $50-$55M EBITDA, analyst consensus analyst estimates are $54M. EBITDA margins continue to improve and the majority of their revenue is in USD, as it stands the currency fluctuations are in favour of Appen as their guidance was based on 1 AUD = 0.80 USD cents.
 
The Non-executive Chairman Christopher Vonwiller has sold 2 million shares about 15% of his holdings this week for personal reasons/philanthropic endeavours. However he still remains the company's largest shareholder (10.4% of outstanding stock) and intends to remain a committed long-term shareholder.

need to closely monitor this to ensure that the sell-down was in good faith. I've tightened my stop losses to $9.50.
 
Appen reported its first half year results for FY18, very good results with some huge growth numbers.

Only real concerns are its Language Resources division which saw only 4% revenue growth and a decrease of 4.1M EBITDA from 7.5M to 3.4M (-55%) otherwise APX would have shot through the roof.
Language Resources margins were down due to a change in the mix of work in this period. The division completed less complex government work and more projects in the high-growth technology sector. This is seen as a timing issue, not structural. However, Appen is investing to win increased share in the technology sector with a view to margin improvement over time.

Although this was offset by huge growth in Content Relevance with an increase of 146% in revenue and margins increased to 21.7%

Overall I continue to hold a very large position and will continue to hold as there is a lot of upside growth here for scalability and productivity as they integrate Leapforce into Appen and are in the process of implementing all of Appen’s customer-facing projects on Leapforce’s scalable crowd-management platform, now called Appen Connect which is due to be launched in the first quarter of next year.

YTD revenue plus orders in hand for delivery in 2018 ~$250m at end July 2018 Note that more purchase orders are expected to be received in 2H 2018 vs. prior corresponding periods, due to new customers with more frequent purchase order cycles. The Company’s full year underlying EBITDA for the year ending Dec 31st 2018 is currently forecast to be in the range $54m - $59m (at A$1 = US$0.80)


Summary of the highlights below:



 
Another cracker result by Appen today for its full year 2018 results.

Materially ahead of EBITDA guidance of $54 - 59M. Reported underlying EBITDA was $71.3M (circa 26% higher than guidance).

Outlook for FY19 is $85 - $90M after its $6M investment in engineering team (hired a new CTO) which is circa 20-25% EBITDA growth probably on the conservative side.

It's currently a 5-bagger for me, with real potential for a 10-bagger

Summary of the results below;
Every industry points to Automation, AI, Deep learning and Appen is in the heart of it.


 
leyy said:
Anyone still following Appen? I have been quietly holding and accumulating this stock.
Click to expand...

Me too. We had the single largest increase out of the whole ASX 200 today, so I read.
 
APPEN TO ACQUIRE FIGURE EIGHT AND LAUNCH CAPITAL RAISING

A summary of the acquisition and key slides from the investor presentation below:

Only key concern is that it is not immediately EBITDA positive, it is still loss making until H2FY20.

Some huge customers Amazon Web Services, Google, Microsoft, eBay, Linkedin, Amex, Yahoo, Facebook and Twitter.

Initial review of the acquisition is positive.

Let's see how the market reacts.





 
leyy said:
APPEN TO ACQUIRE FIGURE EIGHT AND LAUNCH CAPITAL RAISING

Only key concern is that it is not immediately EBITDA positive, it is still loss making until H2FY20.
Click to expand...

In the long run, automating some of what now are now manual processes will be great, and that's what the acquisition of Figure Eight brings. However, FE doesn't make a profit. So we're paying good money for a company who's losing money. Plus, there's two capital raisings to achieve this. The first and biggest, our shareholders don't have access to. So a dilution in shares, which drops our EPS even more.

It could be a very bumpy ride. Hopefully, worth it in the long run.
 


Motley reported:
Appen share price swings on updated profit guidance

Tom Richardson | May 31, 2019 | More on: APX

Machine learning business Appen Ltd (ASX: APX) this morning told investors to expect EBITDA between $85 million to $90 million for the year ending December 31 2019 using a USD/ AUD exchange rate of 74 cents.

The group also reported that its latest giant acquisition in Figure Eight is performing to expectation and that revenue to mid-May 2019 including Figure Eight’s contribution came in at around $270 million. By comparison Appen posted EBITDA of $71.3 million on revenue of $364.3 million for the whole of financial year 2018.

In March 2019 it raised around $300 million from institutional and retail investors via the issue of new shares at $21.50 each.

Appen’s chairman also told investors today that diversity of revenue sources remains a priority area for the business to develop. The shares have swung wildly between a low of $25.47 and record high of $29.70 in response to today’s news.


ASX announcements today and CEO Presentation included following slides





 
The reaction to all this seemingly good news? APX is down today.
 
verce said:
The market cap is 3.3 BILLION
Click to expand...

What do you think that means?

Zaxon said:
The reaction to all this seemingly good news? APX is down today
Click to expand...

Market is pretty erratic at the moment and it seems to me to create more volatility in the businesses like APX that have so much perfect, exponential growth baked into the price. I suspect there was some misunderstanding of the guidance, also its based on a significantly higher AUD than current levels so could be conservative.
 
ASX Announcement today
29/08/2019 8:13:54 AM FY19 Half Year Results (uploaded file below)

The market liked today's Announcement but below 12 month high $32.00 in July 2019
-- was up to $28.87



Outlook
The company’s full year underlying EBITDA (including Figure Eight) is trending towards the upper end of $85 million to $90 million. This guidance is based on the Australian dollar averaging US$0.74 between August and December 2019, whereas the local currency is currently fetching 67 U.S. cents.







 

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Last edited:
bigdog said:
ASX Announcement today
29/08/2019 8:13:54 AM FY19 Half Year Results (uploaded file below)

The market liked today's Announcement but below 12 month high $32.00 in July 2019
-- was up to $28.87
Click to expand...
You've copied a Commsec screenshot for Afterpay Touch (APT)
 
tinhat said:
You've copied a Commsec screenshot for Afterpay Touch (APT)
Click to expand...

LOL! He is a serial offender for quote posting long winded publicly available articles, with no content at all from himself. It adds no value and clogs threads up with highly promotional material that even if members wanted to read it, they would just go to the commercial site that posted it originally.

Most forums dont allow it, for obvious reasons.
 
The content in the bullet points is not bad in terms of content. But lengthy articles may be a bit tedious to read through, so have to agree with galumay. Just a highlights reel with a small explanation would have been better.
 
I try not to look back at past trades but APX just came up in another scan tonight and I noticed that I sold out on the 1/11/2019 as it was trending sideways and took the hit of -2.3% loss......then I look at what is happening today and boom !!! up 13% today and 24% since I sold.

Frustrating but you can't win them all unfortunately
 
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