The market may have been pushing higher again on Tuesday, but the same cannot be said for the Appen Ltd (ASX: APX) share price.
The artificial intelligence data services company's shares continued their slide with a decline of almost 1% to $4.66.
This latest decline means the Appen share price is now down 20% since this time last month.
Has the Appen share price bottomed?
Unfortunately, one leading broker still believes the Appen share price can fall from current levels.
According to a note out of Bell Potter, just a week after downgrading the company's shares to a hold rating, last week the broker went a step further by downgrading its shares to a sell rating with a $4.25 price target.
This price target implies potential downside of 9% for investors over the next 12 months.
What did the broker say?
Bell Potter was disappointed with Appen's performance during the first half of FY 2022.
And while its analysts continue to forecast a huge rebound in the second half and solid growth in FY 2023 and FY 2024, the broker acknowledges that these forecasts are uncertain.
It commented:
There is no change in our forecasts for Appen which we only updated last week after the company provided an updated on the 1H2022 result and 2022 outlook. We continue to forecast underlying EBITDA of US$40.0m in 2022 which implies an H2 result of US$31.5m after Appen said the H1 result would be US$8.5m.
We note, however, there is no guidance for 2H2022 and 2022 and very little visibility on what the H2 result will be after the company said "the conversion of forward orders to sales is less certain this year compared to prior years". We also continue to forecast underlying EBITDA of US$60.8m in 2023 and US$69.0m in 2024 but, again, there is very little visibility on what the results will be in these years. Our forecasts in 2023 and 2024 do assume a rebound in digital advertising and customer spend but the timing and extent of this turnaround is uncertain.
