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Why I would buy Appen and these exciting ASX tech shares

I think that the Australian share market is home to a good number of quality tech shares that are worthy of a spot in most portfolios.

Three fast-growing tech shares which I think are amongst the best on the market today are listed below. Here’s why I like them:

Appen Ltd (ASX: APX)

Appen is a global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence. Due to the accelerating AI market and the high and growing demand for quality training data, Appen has been growing at an incredible rate. In its recently announced FY 2018 results, the company achieved underlying EBITDA of $71.3 million, which was an increase of 153% on FY 2017’s result. Looking ahead, management expects the increasing demand for its services to result in underlying EBITDA in the range of $85 million to $90 million in FY 2019. This guidance implies year on year growth of 19% to 26%.

Bravura Solutions Ltd (ASX: BVS)

Bravura Solutions is a provider of software products and services to clients operating in the wealth management and funds administration industries. In the first half of FY 2019 the company posted a 24% increase in revenue to $127.4 million and a 28% lift in EBITDA to $23.8 million. A key driver of this growth was its popular Sonata product which continues to grow strongly. Management advised that the platform’s compelling value proposition which supports clients with managing new regulation, digital, and cost pressures has driven significant growth in Sonata revenue. Due to the quality of the product and its sizeable market opportunity, I expect it to continue to underpin the company’s growth for many years to come.

Xero Limited (ASX: XRO)

Xero is a cloud-based business and accounting software provider which has been growing at an impressive rate in recent years. Pleasingly, this has continued to be the case in FY 2019. In the first half of the financial year Xero posted a 37% increase in first half revenue to NZ$256.5 million and a 40% lift in annualised monthly recurring revenue to NZ$589.1 million. This was driven by its high retention rate and the addition of 193,000 net new subscribers. Due to the quality of its product and its international expansion opportunity, I believe Xero is well-positioned to continue this strong growth for the next few years.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Appen Ltd, Bravura Solutions Ltd, and Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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