Why this top broker thinks the Appen (ASX:APX) share price can double

This former market darling has been tipped to rebound…

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The Appen Ltd (ASX: APX) share price was out of form again on Monday.

At one stage, the artificial intelligence (AI) data services company’s shares were down almost 4% to a multi-year low of $9.28.

When the Appen share price reached this level, it meant it had fallen a disappointing 64% since the start of the year.

Is the weakness in the Appen share price a buying opportunity?

While the decline in the Appen share price is bitterly disappointing for shareholders, it could be a buying opportunity for non-shareholders.

That’s the view of the team at Citi, which remain very positive on the company despite its recent struggles.

According to a recent note, the broker has a buy rating and $18.80 price target on the company’s shares.

Based on the latest Appen share price, this implies potential upside of greater than 100% over the next 12 months.

What did the broker say?

Citi remains upbeat on Appen’s outlook and has recently highlighted an acceleration in advertising revenue from Facebook and Google as a reason to be positive.

The broker believes this could support increased investment in AI and machine learning activities in the near future, which could lead to increased demand for Appen’s services.

After all, it was the lack of investment in these activities from big tech companies that weighed on Appen’s performance over the last 12 months. So, any increased investment could only be good news for Appen.

And while the broker acknowledges that there are concerns that Appen is facing structural issues, it doesn’t believe this is the case and sees positive tailwinds supporting its growth over the medium term.

All in all, it feels this could make the Appen share price a value play at the current level.

Should you invest $1,000 in Appen right now?

Before you consider Appen, you'll want to hear this.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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