Here’s why the Appen (ASX:APX) share price is rocketing 16% higher

The Appen Ltd (ASX:APX) share price is rocketing higher on Wednesday despite the market selloff. Here’s why its shares are on fire…
The post Here’s why the Appen (ASX:APX) share price is rocketing 16% higher appeared first on The Motley Fool Australia. –

rising asx share price represented by boy dressed in business suit with rocket wings

The market may be a sea of red on Wednesday but that hasn’t stopped the Appen Ltd (ASX: APX) share price from rocketing higher.

In afternoon trade, the artificial intelligence (AI) data services company’s shares are up a sizeable 16% to $13.07.

However, despite this strong gain, the Appen share price is still down a massive 70% from its 52-week high.

Why is the Appen share price rocketing higher today?

The catalyst for the rise in the Appen share price today was the release of a business and trading update this morning.

In respect to the former, Appen is restructuring its business to align to its product-led growth strategy and distinct customer propositions.

This will see the company operate with four customer-facing business units – Global, Enterprise, China, and Government.

Management believes the changes will provide greater visibility of the drivers and performance of the business. Furthermore, it notes that the changes reflect Appen’s evolution from being the leading provider of AI data annotation services to a provider of a broad range of AI data annotation products and solutions that unlock growth in new markets.

What else?

While the above is a positive move, the main driver of the Appen share price performance today is likely to have been its trading update.

Analysts were very disappointed recently when the company neglected to provide an update on its performance while presenting at the Macquarie Group Ltd (ASX: MQG) conference. Particularly given comments about changing behaviour from its customers and fears over increasing competition.

Positively, this morning the company provided the market with what it wanted and, as you might have guessed from the Appen share price, the news was positive.

According to the release, Appen is on track to achieve underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of US$83 million to US$90 million in FY 2021.

This is in line with its previous guidance of A$120 million to A$130 million (based on constant currency of 1 AUD = US$0.6904) and adjusted into US dollars to reflect a change in its reporting currency. It also represents growth of 18% to 28% year on year.

Shareholders will no doubt be hoping it is onwards and upwards for the Appen share price now things are becoming a little less uncertain.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the Appen (ASX:APX) share price is rocketing 16% higher appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!