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.
For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked...
But knowing which blue chips to buy, and when, can be fraught with danger.
The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2019."
Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.
Click here to claim your free report.
Motley Fool contributor Lachlan Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. 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.