The Appen Ltd (ASX: APX) share price has been a surprisingly poor performer over the last seven days.
Since peaking at a record high of $43.66 on the 26 August, the artificial intelligence company's shares have lost 20% of their value.
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Why is the Appen share price down 20% from its high?
Investors have been selling Appen's shares since the release of its half year results last Thursday. Although the company delivered solid growth, it fell a touch short of expectations.
For the six months ended 30 June 2020, Appen reported a 25% increase in revenue to $306.2 million.
The key driver of its growth was its key Relevance segment, which posted a 34% increase in revenue to $273.9 million. This offset weakness in the company's Speech & Image segment, which reported a 20% decline in revenue to $31.9 million.
However, due partly to growth investments, its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew only 6% to $49.1 million.
This means that the company will need a stellar second half to achieve its FY 2020 underlying EBITDA guidance.
Appen reiterated its guidance of $125 million to $130 million, which means it will need to achieve underlying EBITDA of $76 million to $81 million in the second half.
However, as well as COVID headwinds, the company will be battling currency headwinds during the half after the Australian dollar strengthened. Appen's guidance was based on an average exchange rate of 70 U.S. cents during August to December. Whereas the current exchange rate is 73.1 U.S. cents.
Should you invest?
Although I'm not overly convinced the company will achieve it guidance in FY 2020, I believe this has been factored into the Appen share price now.
In light of this, I think it would be worth taking advantage of this pullback to pick up shares. Especially given its extremely positive long term growth outlook thanks to the artificial intelligence boom.
I'm not the only one that is positive on Appen. A note out of UBS last week reveals that its analysts have put a buy rating and $44.00 price target on its shares. It expects the company's growth to accelerate in 2021.
