Much to the delight of its shareholders, the Appen Ltd (ASX: APX) share price has vastly outperformed the local share market this year.
Year-to-date the data solutions and services provider's shares have climbed 83%, compared to the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) which is down ever so slightly since the turn of the year.
Is it too late to snap up shares?
While it certainly isn't the bargain buy it was around six months ago, I still see a lot of value in Appen's shares today for buy and hold investors.
Based on management's forecast for full-year EBITDA growth at the upper-end of its 40% to 50% guidance range, I estimate that Appen's shares are changing hands at approximately 30x forward earnings.
While this clearly a premium over the market average, I believe its strong long-term growth prospects justifies this.
Thanks to the insatiable demand for machine learning and artificial intelligence services from global tech giants, I believe Appen is positioned perfectly to continue growing its bottom line at a strong rate.
Especially with the hard work management has done at expanding its margins.
While volume price pressures have impacted the company and are expected to persist for at least the short term, productivity improvements and cost management led to Appen's EBITDA margin expanding from 14.5% in the second-half of FY 2016 to 17.2% in the first-half of FY 2017.
Overall, despite its strong gain this year, I would still put it up there with peers Altium Limited (ASX: ALU) and XERO FPO NZX (ASX: XRO) as one of the best options for investors in the information technology sector.
