APX - Appen Limited
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Went looking for a speccie to throw into the pot for this months Stock picking competition.,
The Motley Fools suggested Appen was value. Having checked out it's performance I feel I have arrived rather late to the party and am here to give it the Kiss of Death. ((Hopefully not..)
Appen Limited (APX) is a global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence.
Appen provides language technology data and services in more than 150 languages and dialects to technology companies and government agencies. Its activities are divided into two business divisions: Content Relevance and Speech and Data Collection.
Appen shares first listed on the ASX in 2015 and the APX share price has seen exponential growth since then. The company is one of the members of ASX tech group ‘WAAAX’, the fast growing collection of tech mid-caps that is high on many investor wishlists.
https://www.fool.com.au/tickers/ASX-APX/
The Motley Fools suggested Appen was value. Having checked out it's performance I feel I have arrived rather late to the party and am here to give it the Kiss of Death. ((Hopefully not..)
Appen Limited (APX) is a global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence.
Appen provides language technology data and services in more than 150 languages and dialects to technology companies and government agencies. Its activities are divided into two business divisions: Content Relevance and Speech and Data Collection.
Appen shares first listed on the ASX in 2015 and the APX share price has seen exponential growth since then. The company is one of the members of ASX tech group ‘WAAAX’, the fast growing collection of tech mid-caps that is high on many investor wishlists.
https://www.fool.com.au/tickers/ASX-APX/
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Nice start to the year for Appen, would love to know what the chartists think?
Was planing on adding this tomorrow, wish I had got in Monday before today’s 4.5% bounce.
Was planing on adding this tomorrow, wish I had got in Monday before today’s 4.5% bounce.
Dona Ferentes
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Chairman Chris Vonwiller has sold two million shares for "a number of personal reasons" and delivered himself a $58 million payday after selling at $29 a share. He remains the company's largest shareholder with approximately nine million shares, or around 7.5 per cent of issued capital. His remaining stake is worth around $272 million.
Appen chief executive Mark Brayan sold 95,535 shares, pocketing $2.9 million, to satisfy tax obligations and diversify his personal investments. He sold at $30.60 a share.
Non-executive director Bill Pulver sold 275,000 shares, delivering around $8.4 million. He sold at $30.68 a share
.... now, what was that P/E, again?
Appen chief executive Mark Brayan sold 95,535 shares, pocketing $2.9 million, to satisfy tax obligations and diversify his personal investments. He sold at $30.60 a share.
Non-executive director Bill Pulver sold 275,000 shares, delivering around $8.4 million. He sold at $30.68 a share
.... now, what was that P/E, again?
Dona Ferentes
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Appen hacked by 'malicious' actors
Appen says there has been an incident involving "unauthorised access" to its systems via a third party provider. It said the "malicious actors" stole credentials enabling access to Appen's systems.
The "unauthorised" actors gained access to Appen's user authentication database, which is restricteed to records on Appen's annotation platform. The database contained details such as customer names, email addresses, encrypted passwords and IP addresses. The third party system was in use on a trial basis and is no longer used by Appen.
"Appen believes it was the victim of a random attack and it is aware that other companies have experienced similar incidents via the same third-party provider."
Appen says the unauthorised access was detected soon after it occurred. The company says the impact of the incident is "limited in nature" and not material.
Appen says there has been an incident involving "unauthorised access" to its systems via a third party provider. It said the "malicious actors" stole credentials enabling access to Appen's systems.
The "unauthorised" actors gained access to Appen's user authentication database, which is restricteed to records on Appen's annotation platform. The database contained details such as customer names, email addresses, encrypted passwords and IP addresses. The third party system was in use on a trial basis and is no longer used by Appen.
"Appen believes it was the victim of a random attack and it is aware that other companies have experienced similar incidents via the same third-party provider."
Appen says the unauthorised access was detected soon after it occurred. The company says the impact of the incident is "limited in nature" and not material.
Dona Ferentes
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Appen has slashed full year earnings guidance after warning fourth quarter earnings are failing to pick up as they traditionally do as its big tech customers have been disrupted by the pandemic.
The company had forecast full year underlying EBITDA of between $125 million and $130 million but has now guided to a range of between $106 million to $109 million (equivalent to a guidance range of $108 million and $111 million applying the originally assumed exchange rate of US70¢ for the second half).
The finalised November results showed that while the fourth quarter had improved on the third quarter, the "usual ramp up we traditionally see at this time of year is not occurring".
The company had forecast full year underlying EBITDA of between $125 million and $130 million but has now guided to a range of between $106 million to $109 million (equivalent to a guidance range of $108 million and $111 million applying the originally assumed exchange rate of US70¢ for the second half).
The finalised November results showed that while the fourth quarter had improved on the third quarter, the "usual ramp up we traditionally see at this time of year is not occurring".
Appen expects second half underlying EBITDA is expected to grow at 30 per cent-plus over the first half, applying first half exchange rates to second half performance.
galumay
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I loved the tweet I saw this morning, "APX down as Investors struggle to remember what the business actually does, again."
Dona Ferentes
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lol
and this gem: "Appen this year reported not one, but two, underlying EBITDA measures, the second of which remarkably excluded investment sales as well as marketing and engineering costs."
Metricks, methinks
( "88 per cent of companies used non-statutory performance measures when determining executive remuneration, mostly on short-term incentive plans" - KPMG report)
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12% Gap Down for a $3.6 billion dollar Company is no small change 
I'll stick with my Specs for the moment
I'll stick with my Specs for the moment
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WAAAX stocks losing their shine, perhaps?
In Appen's case, I tend to give some weight to the plausibility of the CEO's explanation for the revenue drop being attributed to their primary customers responding to COVID with new projects that have yet to require the training services Appen provides.
It does bring up the question of key customer risk in terms of revenue attribution.
SMH excerpt;
"COVID has clearly disrupted and reshaped the priorities and activities of our customers."
RBC Capital’s Garry Sherriff said that in the wake of Facebook, Microsoft, Google, and Amazon all beating consensus advertising revenue estimates in their latest quarterlies, Appen's downgrade begs the question - "Is it customer behavior changing or also competitive pressures?”
However, Appen chief executive Mr Brayan assured analysts it was a change in customer behaviour.
"We're in the middle of a storm of activity," he said, as Appen's major tech customers reshape their priorities in the wake of the pandemic.
"The pandemic has meant that our major customers are accelerating the new product development," he said.
Mr Brayan added that while work on some large mature projects had slowed down Appen was well placed to pick up new projects in the new year.
"Material projects have slowed as a result and reduced our revenue and the new projects are yet to require the data volumes that offset the slowdown."
"Although it is impacting this year, it is setting a foundation for a strong year in 2021," he said.
"This new product development trend is positive for us and we are seeing a significant increase in the number of new projects amongst our major customers, albeit some are early in their lifecycle."
In Appen's case, I tend to give some weight to the plausibility of the CEO's explanation for the revenue drop being attributed to their primary customers responding to COVID with new projects that have yet to require the training services Appen provides.
It does bring up the question of key customer risk in terms of revenue attribution.
SMH excerpt;
"COVID has clearly disrupted and reshaped the priorities and activities of our customers."
RBC Capital’s Garry Sherriff said that in the wake of Facebook, Microsoft, Google, and Amazon all beating consensus advertising revenue estimates in their latest quarterlies, Appen's downgrade begs the question - "Is it customer behavior changing or also competitive pressures?”
However, Appen chief executive Mr Brayan assured analysts it was a change in customer behaviour.
"We're in the middle of a storm of activity," he said, as Appen's major tech customers reshape their priorities in the wake of the pandemic.
"The pandemic has meant that our major customers are accelerating the new product development," he said.
Mr Brayan added that while work on some large mature projects had slowed down Appen was well placed to pick up new projects in the new year.
"Material projects have slowed as a result and reduced our revenue and the new projects are yet to require the data volumes that offset the slowdown."
"Although it is impacting this year, it is setting a foundation for a strong year in 2021," he said.
"This new product development trend is positive for us and we are seeing a significant increase in the number of new projects amongst our major customers, albeit some are early in their lifecycle."
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My third pick for the 2021 comp.
Beaten down towards the end of 2020, but I think the reduced earnings are deferred rather than lost. Their language niche seems a good one to me. I also like it when Aussie tech companies do well on the world stage.
Beaten down towards the end of 2020, but I think the reduced earnings are deferred rather than lost. Their language niche seems a good one to me. I also like it when Aussie tech companies do well on the world stage.
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Potentially time to start taking notice again.
Appen and I have a long history together (early 2019), I've always been 1 step behind it and it gets away from me... never held!
No idea about FA which I am guessing is what recessed the price?
Appen and I have a long history together (early 2019), I've always been 1 step behind it and it gets away from me... never held!
No idea about FA which I am guessing is what recessed the price?
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Well, clearly a don't do it in hindsight... quite a low dividend figure.
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Tech stocks have come under a bit of selling pressure lately, including this that's in the WAAX basket.
Dona Ferentes
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Contrasting results from tech darlings, Appen and Wisetech on Wednesday. The former missed its own guidance for earnings, the latter upped its forecast – not because of better revenues but the old standby these days, cost cutting. While Appen faces a year of standing still, WiseTech sees the 2020 improvement continuing, driven by cost cuts and other changes. WiseTech lifted its guidance for the year to June after delivering better than expected earnings for the December half.
In contrast, shares in Appen, another tech fave, fell more than 12% after it missed earnings targets in its full year results on Wednesday. The company reported an 11% in revenue to $600 million, a 23% rise in net profit to $50.5 million and a 5.5 cents a share dividend that will be paid March 19. The company reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $101.7 million which is below its downgraded guidance last year. In December, Appen said it expects 2020 underlying EBITDA – including the impact of the stronger Australian dollar – to be in the range $106 million to $109 million at the actual exchange rates to November of 74 US cents. The original guidance was for EBITDA of $125 million to $130 million at that exchange rate.
The reported figure of just over $101 million was more than 205 lower than the original range, so the impact of the dollar’s rise has been substantial, but it added to the negative impact of the way its big clients were forced to change business because of COVID in the final months of 2020. The Aussie dollar is now around 78 US cents (and was just over 77 US cents at the end of 2020), so the strengthening currency has been an unwelcome evolution over year to December.
Appen makes most of its money in the US from crowdsourcing a global workforce that does the low-level grunt work for the technology giants. The workers teach computers to recognise basic images and speech, laying down the basic groundwork for the development of ‘Artificial Intelligence’ solutions. Some 80% per cent of Appen’s revenue is generated by just five customers which includes Google, Facebook, Amazon and Microsoft.
The December downgrade was triggered by its technology customers forced to deal with more lockdowns in California and defer completion of old projects and shift resources to new ideas in the wake of COVID-19. Those moves saw Appen’s traditionally strong fourth quarter weaker than expected, with underlying earnings for the period falling around 15% under forecast. Appen says most of deferred projects are due to restart this year.
The company is forecasting underlying EBITDA of $120 million to $130 million for the 2021 financial year ending December 31. That’s no better than the original forecast for 2020, so the current year will be one where Appen stands still.
CEO Mark Brayan said “2020 was a breakout year for new sales, new projects, committed revenue and our entry into China, but it was not without its challenges” – the latter something of an understatement.
The shares fell 12% to $17.81 (close to the day’s low of $17.80). That’s less than half year high of $43.66 and closing on the year low of $15.70.
www.sharecafe.com.au
In contrast, shares in Appen, another tech fave, fell more than 12% after it missed earnings targets in its full year results on Wednesday. The company reported an 11% in revenue to $600 million, a 23% rise in net profit to $50.5 million and a 5.5 cents a share dividend that will be paid March 19. The company reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $101.7 million which is below its downgraded guidance last year. In December, Appen said it expects 2020 underlying EBITDA – including the impact of the stronger Australian dollar – to be in the range $106 million to $109 million at the actual exchange rates to November of 74 US cents. The original guidance was for EBITDA of $125 million to $130 million at that exchange rate.
The reported figure of just over $101 million was more than 205 lower than the original range, so the impact of the dollar’s rise has been substantial, but it added to the negative impact of the way its big clients were forced to change business because of COVID in the final months of 2020. The Aussie dollar is now around 78 US cents (and was just over 77 US cents at the end of 2020), so the strengthening currency has been an unwelcome evolution over year to December.
Appen makes most of its money in the US from crowdsourcing a global workforce that does the low-level grunt work for the technology giants. The workers teach computers to recognise basic images and speech, laying down the basic groundwork for the development of ‘Artificial Intelligence’ solutions. Some 80% per cent of Appen’s revenue is generated by just five customers which includes Google, Facebook, Amazon and Microsoft.
The December downgrade was triggered by its technology customers forced to deal with more lockdowns in California and defer completion of old projects and shift resources to new ideas in the wake of COVID-19. Those moves saw Appen’s traditionally strong fourth quarter weaker than expected, with underlying earnings for the period falling around 15% under forecast. Appen says most of deferred projects are due to restart this year.
The company is forecasting underlying EBITDA of $120 million to $130 million for the 2021 financial year ending December 31. That’s no better than the original forecast for 2020, so the current year will be one where Appen stands still.
CEO Mark Brayan said “2020 was a breakout year for new sales, new projects, committed revenue and our entry into China, but it was not without its challenges” – the latter something of an understatement.
The shares fell 12% to $17.81 (close to the day’s low of $17.80). That’s less than half year high of $43.66 and closing on the year low of $15.70.
WiseTech, Appen in Binary Opposition – ShareCafe
Contrasting results from tech darlings Appen and Wisetech on Wednesday, as the former misses its own guidance for earnings and the latter ups its forecast.
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Enthusiastic fundamental take on Appen dated in January from an American. Think he said s.p was around $20 usd at the time of video. Thought it was worth much more as a long term hold (10 years) on continuing various multiples that I don't think about. Best short explanation for a layman of what Appen actually does that I have heard.
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Nice analysis @Dona Ferentes , today A2M has joined the falling giants !Contrasting results from tech darlings, Appen and Wisetech on Wednesday. The former missed its own guidance for earnings, the latter upped its forecast – not because of better revenues but the old standby these days, cost cutting. While Appen faces a year of standing still, WiseTech sees the 2020 improvement continuing, driven by cost cuts and other changes. WiseTech lifted its guidance for the year to June after delivering better than expected earnings for the December half.
In contrast, shares in Appen, another tech fave, fell more than 12% after it missed earnings targets in its full year results on Wednesday. The company reported an 11% in revenue to $600 million, a 23% rise in net profit to $50.5 million and a 5.5 cents a share dividend that will be paid March 19. The company reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $101.7 million which is below its downgraded guidance last year. In December, Appen said it expects 2020 underlying EBITDA – including the impact of the stronger Australian dollar – to be in the range $106 million to $109 million at the actual exchange rates to November of 74 US cents. The original guidance was for EBITDA of $125 million to $130 million at that exchange rate.
The reported figure of just over $101 million was more than 205 lower than the original range, so the impact of the dollar’s rise has been substantial, but it added to the negative impact of the way its big clients were forced to change business because of COVID in the final months of 2020. The Aussie dollar is now around 78 US cents (and was just over 77 US cents at the end of 2020), so the strengthening currency has been an unwelcome evolution over year to December.
Appen makes most of its money in the US from crowdsourcing a global workforce that does the low-level grunt work for the technology giants. The workers teach computers to recognise basic images and speech, laying down the basic groundwork for the development of ‘Artificial Intelligence’ solutions. Some 80% per cent of Appen’s revenue is generated by just five customers which includes Google, Facebook, Amazon and Microsoft.
The December downgrade was triggered by its technology customers forced to deal with more lockdowns in California and defer completion of old projects and shift resources to new ideas in the wake of COVID-19. Those moves saw Appen’s traditionally strong fourth quarter weaker than expected, with underlying earnings for the period falling around 15% under forecast. Appen says most of deferred projects are due to restart this year.
The company is forecasting underlying EBITDA of $120 million to $130 million for the 2021 financial year ending December 31. That’s no better than the original forecast for 2020, so the current year will be one where Appen stands still.
CEO Mark Brayan said “2020 was a breakout year for new sales, new projects, committed revenue and our entry into China, but it was not without its challenges” – the latter something of an understatement.
The shares fell 12% to $17.81 (close to the day’s low of $17.80). That’s less than half year high of $43.66 and closing on the year low of $15.70.
WiseTech, Appen in Binary Opposition – ShareCafe
Contrasting results from tech darlings Appen and Wisetech on Wednesday, as the former misses its own guidance for earnings and the latter ups its forecast.
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Just bought 1,000 APX @ 16.92, already in the red, lol
Getting a bit impulsive but Appen has been high on my wishlist for a couple of years.
Gee, better find something to sell soon, one of my speccies better come in.
Getting a bit impulsive but Appen has been high on my wishlist for a couple of years.
Gee, better find something to sell soon, one of my speccies better come in.
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Do you really think it's that good to hold long term ? What about the crowd favourite that's fallen out of favour (especially today's 17% drop) A2M ?
Or are these highly boomed stocks coming down to a more realistic valuation ? Or worse still, coming off the wheels ?
