The Appen Ltd (ASX: APX) share price has risen more than 90% this year and more than 35% in the last week alone to be a standout performer in the S&P/ASX200 Index (ASX: XJO). The company's share price reached a record high of $24.53 last week before closing out the week at $24.37 per share, buoyed by strong performance in domestic equities and a stellar February reporting season for Appen.
What's caused the Appen share price mania?
I think what we're seeing now is the 2019 version of the Afterpay Touch Group Ltd (ASX: APT) share price explosion as broad economic strength and continued earnings outperformance has fuelled Appen to greater heights. And the best part for investors? I think there's plenty of headroom left for the Aussie data curation company.
Appen shares surged more than 20% in late February as its half-year earnings beat estimates by quite a margin, which was largely on the back of sustained demand for speech and natural language data. The company posted earnings before interest, tax, depreciation and amortisation (EBITDA) of $71.3 million and continues to cash-in on demand for artificial intelligence (AI) and machine learning services across the globe.
The company's results indicated strong margin and volume growth, while it also benefitted from the continued softening of the Aussie dollar against its US counterpart (where Appen has a significant revenue base).
Why do I think the Appen share price could go further?
Appen, much like Afterpay in recent times, has a knack of outperforming expectations and continuing to find growth when others think they've reached their limits.
Management has made several key strategic decisions (including the 2017 acquisition of search engine evaluator, Leapforce) which have thus far paid dividends for the company and its share price. With ever-increasing demand from companies looking to refine and enhance their AI and machine learning capabilities and no signs of margin compression or significant competitive threats, I think we could be talking about Appen as the "Afterpay of 2019".
For those who think they've missed the boat on Appen, I'd suggest checking out these top growth shares that have been tipped as market beaters.
