Why is the Appen (ASX:APX) share price underperforming its ASX 200 tech peers?

Here's what's been dragging on Appen's stock lately.

Sad investor watching the financial stock market crash on his laptop computer.

Image source: Getty Images

Key points

  • Appen is the worst performing ASX 200 info tech share of the last 12 months
  • It has fallen 57% since this time last year, spurred by a few key announcements
  • Right now, the Appen share price is $9.88

The Appen Ltd (ASX: APX) share price has fallen 57% over the last 12 months, making it the worst performing stock on the S&P/ASX 200 Info Tech Index (ASX: XIJ).

This time last year, stock in the company providing data systems for artificial intelligence was trading at $23.08 apiece. At the time of writing, the Appen share price is $9.88.

For context, the S&P/ASX 200 Index (ASX: XJO) has gained 8% in that time, while the ASX 200 information technology sector has slumped 14%.

Let's take a look at what's been dragging on the Appen share price over the last 12 months.

What's weighed on the Appen share price lately?

There hasn't been much news from Appen lately, but most of what has hit the market has been detrimental to its share price.

The first price-sensitive release of the last 12 months from the company dropped in February and detailed its results for the year ended 31 December 2020. Despite the company's earnings and outlook appearing strong, the market bid the Appen share price down 12%.

The release of a presentation in May also saw its stock tumble. It fell 21% on the back of comments about COVID-19's impact on the company's business and customers.

However, the Appen share price rebounded 17% after a positive trading update later that month. Then, the company announced it was to restructure its business and was on track to reach its previously provided financial year 2021 guidance.

Finally, the most recent price-sensitive news from Appen came in August when the company released its earnings for the first half of 2021 and news of an acquisition.

Appen's net profit after tax slumped 55.1% compared to the previous first half, reaching US$6.7 million. Though, its group revenue was down just 2% and its annual contract value grew 16%.

Additionally, it announced it was spending US$25 million to acquire location data provider, Quadrant.

Readers might be sensing a pattern here and, indeed, the company's share price slipped 21% that day.

How Appen's performance stacks up against its ASX 200 tech peers'

Appen is leading the ASX 200 info tech index's slump.

However, the Afterpay Ltd (ASX: APT) share price isn't too far behind it.

The soon-to-be-delisted buy now, pay later giant's stock has fallen 49% over the last 12 months.

Meanwhile, that of Codan Limited (ASX: CDA) has slipped 23%.

Conversely, the WiseTech Global Ltd (ASX: WTC) share price is buoying the index, having gained 75% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, Appen Ltd, and WiseTech Global. The Motley Fool Australia owns and has recommended Afterpay Limited, Appen Ltd, and WiseTech Global. 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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