Appen (APX) AI Stock Analysis

• Market Cap: AU$294.04M
• Dividend Yield: N/A
• Average Volume (3M): 7.55M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.67
• Revenue Growth: -13.61%
• EPS Growth: 86.37%
• Country: AU
• Employees: 1,130
• Sector: Technology
• Sector Strength: 90
• Industry: Information Technology Services
• EPS (TTM): -0.01
• Shares Outstanding: 264,902,700
• 10 Day Avg. Volume: 6,789,373
• 30 Day Avg. Volume: 7,552,213
• PEG Ratio: <0.01
• Price to Book (P/B): 1.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -23.63
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$2.35
• Price Target Upside: 111.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 50 Neutral
• Price Target: AU$1.00 ▼(-9.91%Downside)

Appen Ltd. faces financial difficulties with declining revenues and profitability, contributing to a low overall score. While the company has shown recent operational improvements and growth in strategic areas, the negative P/E ratio and past financial underperformance weigh heavily. Positive earnings call sentiment provides some optimism, but significant risks remain.

Appen Business Overview & Revenue Model

Company Description

Appen Limited, together with its subsidiaries, operates as an AI lifecycle company that collects and labels image, text, speech, audio, video, and other data used to build and enhance artificial intelligence systems. It operates through two segments, Global Services and New Markets. The company offers data sourcing services, including image, video, speech, and text data collection services pre-labeled datasets of audio, image, video, and text; and language-based AI solutions. It also provides data preparation services comprising machine learning assisted data annotation tools, which include image annotation, video annotation, text, sensor, audio annotation, and other solutions; enterprise-ready data annotation platform, which offers smart labeling, workflows, in-platform audit, and enterprise analytics; and knowledge graph and ontology support services. The company was formerly known as Appen Holdings Pty Limited and changed its name to Appen Limited in October 2014. Appen Limited was founded in 1996 and is headquartered in Chatswood, Australia.

How the Company Makes Money

Appen Ltd. primarily makes money by offering data solutions and services which are critical for training and improving artificial intelligence and machine learning models. The company's revenue model includes key streams such as data collection, data annotation, and linguistic services. These services are provided on a contractual basis to major technology firms and other enterprises looking to enhance the performance of their AI systems. Appen leverages a global crowd workforce to deliver these services at scale, which allows them to meet the diverse needs of their clients. Significant partnerships with leading technology companies contribute to Appen's earnings by securing long-term contracts and projects that require ongoing data services.

Appen Financial Statement Overview

Summary

Appen Ltd. is facing significant financial challenges with declining revenues, profitability, and cash flow generation. Despite a stable equity base, operational inefficiencies and cash flow constraints pose major issues.

Income Statement

Appen Ltd. has experienced a significant decline in revenue and profitability over recent years. The gross profit margin remains notably low, and the company reported negative net income for the last three years, indicating challenges in maintaining profitability and revenue growth. The lack of EBIT and negative EBITDA margin highlight operational inefficiencies.

Balance Sheet

The company's balance sheet shows a relatively stable equity position, but the debt-to-equity ratio has been increasing due to rising liabilities. The equity ratio remains healthy, suggesting a solid asset base. However, the declining return on equity indicates that the company is struggling to generate returns from shareholder investments.

Cash Flow

Appen Ltd. faces issues with negative free cash flow and inconsistent operating cash flows, reflecting challenges in generating cash from its core operations. The free cash flow to net income ratio is unfavorable, indicating difficulties in converting income into cash flow.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	234.28M	411.31M	559.89M	595.75M	599.39M
Gross Profit	11.34M	42.12M	10.07M	93.01M	111.80M
EBITDA	3.34M	-89.37M	-283.44M	96.31M	81.20M
Net Income	-20.01M	-118.08M	-344.86M	28.52M	38.84M
Balance Sheet
Total Assets	170.59M	155.16M	375.94M	690.68M	598.21M
Cash, Cash Equivalents and Short-Term Investments	54.81M	32.15M	34.55M	65.85M	78.39M
Total Debt	11.04M	12.43M	15.01M	20.71M	25.23M
Total Liabilities	56.27M	62.36M	157.72M	151.69M	113.94M
Stockholders Equity	114.32M	136.00M	218.22M	538.99M	484.27M
Cash Flow
Free Cash Flow	-13.51M	-42.79M	-14.00M	41.07M	63.51M
Operating Cash Flow	-1.01M	-33.66M	26.29M	71.84M	94.02M
Investing Cash Flow	-13.08M	-31.48M	-46.33M	-67.71M	-70.92M
Financing Cash Flow	37.74M	77.28M	-13.74M	-18.85M	-11.85M

Appen Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:APX, the sentiment is Negative. The current price of 1.11 is above the 20-day moving average (MA) of 1.10, above the 50-day MA of 1.10, and below the 200-day MA of 1.79, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 46.07 is Neutral, neither overbought nor oversold. The STOCH value of 14.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:APX.

Appen Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATA	74 Outperform	AU$311.17M	22.98	6.32%	―	32.40%	-2.97%
COS	71 Outperform	AU$110.10M	12.03	12.90%	3.31%	23.66%	-7.71%
Sector *	68 Neutral	¥229.01B	14.30	7.50%	2.69%	9.26%	6.40%
KYP	68 Neutral	AU$95.06M	110.00	3.26%	―	5.37%	-45.95%
CCR	55 Neutral	AU$95.55M	―	-7.65%	―	20.24%	27.33%
DUG	55 Neutral	AU$186.50M	33.61	-5.30%	―	15.87%	-160.30%
APX	50 Neutral	AU$294.04M	―	-19.32%	―	-13.61%	86.37%