The Appen (ASX: APX) share price has tumbled in 2021, particularly since the release of its full-year results. Let’s take a look.
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The Appen Ltd (ASX: APX) share price has been hit hard in 2021, particularly since the release of its full-year results in February. The timing coincides with a 10% tumble in the S&P/ASX All Technology Index (ASX: XTX) over the past month alone.
It’s a far cry from Appen’s all-time high of $43.66 reached in August last year. At the time of writing, the Appen share price is trading at $18.32.
We take a look to see what’s been happening with the artificial intelligence (AI) company.
Why is the Appen share price near multi-year lows?
The Appen share price hasn’t replicated the successes it saw during its first 5 years on the ASX boards. Since COVID-19, the company has struggled to accelerate its growth profile, to match investor’s high expectations.
While its customer base increased over the FY20 period, Appen recorded mixed business performance. Its relevance segment continued to drive the business, while its speech & image division weighed down the overall result.
In addition, the company revealed the pandemic had impacted its online digital advertising. This has led to reduced spend on advertising-related AI programs, with some projects deferred.
Restricted face-to-face sales and customer engagement have also hampered Appen’s efforts to resume business activity.
What do the brokers think?
After reporting its first-half results, a number of brokers have rated the company with varying price points.
Investment banking firm JPMorgan cut its price target for Appen by 18% to $24.75. Macquarie followed suit to also reduce its rating by 16% to $16.00. And Bell Potter had one of the largest markdowns, downgrading Appen shares by 29% with an initiated price of $19.50.
Currently trading at $18.32, up 0.63% today, the Appen share price is swapping hands within the lower-to-mid range of the broker reports.
Looking at valuation metrics, Appen has a market capitalisation of around $2.27 billion, with more than 123 million shares outstanding.
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Aaron Teboneras owns shares of Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.