OTCPK:APPE.F

Stock Analysis Report

Executive Summary

Appen Limited, together with its subsidiaries, provides data solutions and services for machine learning and artificial intelligence applications for technology companies, auto manufacturers, and government agencies in Australia, the United States, and internationally.


Snowflake Analysis

Flawless balance sheet with solid track record.

Share Price & News

How has Appen's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: APPE.F has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

APPE.F

2.9%

US IT

1.7%

US Market


1 Year Return

n/a

APPE.F

40.8%

US IT

23.6%

US Market

Return vs Industry: Insufficient data to determine how APPE.F performed against the US IT industry.

Return vs Market: Insufficient data to determine how APPE.F performed against the US Market.


Shareholder returns

APPE.FIndustryMarket
7 Day0%2.9%1.7%
30 Day0.3%6.3%3.5%
90 Dayn/a15.9%11.7%
1 Yearn/a42.3%40.8%26.2%23.6%
3 Yearn/a110.2%101.2%53.2%43.3%
5 Yearn/a153.8%131.2%75.5%56.1%

Price Volatility Vs. Market

How volatile is Appen's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Appen undervalued compared to its fair value and its price relative to the market?

62.4x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: APPE.F ($15.3) is trading above our estimate of fair value ($12.33)

Significantly Below Fair Value: APPE.F is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: APPE.F is poor value based on its PE Ratio (57.8x) compared to the IT industry average (32x).

PE vs Market: APPE.F is poor value based on its PE Ratio (57.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: APPE.F is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: APPE.F is overvalued based on its PB Ratio (6.4x) compared to the US IT industry average (4.2x).


Next Steps

Future Growth

How is Appen forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

35.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: APPE.F's forecast earnings growth (34% per year) is above the savings rate (1.7%).

Earnings vs Market: APPE.F's earnings (34% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: APPE.F's revenue (16.8% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: APPE.F's revenue (16.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: APPE.F's Return on Equity is forecast to be low in 3 years time (16.5%).


Next Steps

Past Performance

How has Appen performed over the past 5 years?

54.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: APPE.F has high quality earnings.

Growing Profit Margin: APPE.F's current net profit margins (10.1%) are higher than last year (8.2%).


Past Earnings Growth Analysis

Earnings Trend: APPE.F's earnings have grown significantly by 54.1% per year over the past 5 years.

Accelerating Growth: APPE.F's earnings growth over the past year (129.1%) exceeds its 5-year average (54.1% per year).

Earnings vs Industry: APPE.F earnings growth over the past year (129.1%) exceeded the IT industry 16.2%.


Return on Equity

High ROE: APPE.F's Return on Equity (10.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Appen's financial position?


Financial Position Analysis

Short Term Liabilities: APPE.F's short term assets (A$167.4M) exceed its short term liabilities (A$107.7M).

Long Term Liabilities: APPE.F's short term assets (A$167.4M) exceed its long term liabilities (A$35.7M).


Debt to Equity History and Analysis

Debt Level: APPE.F's debt to equity ratio (2.5%) is considered satisfactory.

Reducing Debt: APPE.F's debt to equity ratio has reduced from 11.1% to 2.5% over the past 5 years.

Debt Coverage: APPE.F's debt is well covered by operating cash flow (552.8%).

Interest Coverage: APPE.F's interest payments on its debt are well covered by EBIT (18.7x coverage).


Balance Sheet

Inventory Level: APPE.F has a low level of unsold assets or inventory.

Debt Coverage by Assets: APPE.F's debt is covered by short term assets (assets are 14.5x debt).


Next Steps

Dividend

What is Appen's current dividend yield, its reliability and sustainability?

0.31%

Current Dividend Yield


Dividend Yield vs Market

company0.3%marketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years0.5%

Current dividend yield vs market & industry

Notable Dividend: APPE.F's dividend (0.33%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: APPE.F's dividend (0.33%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: APPE.F is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: APPE.F is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: APPE.F is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of APPE.F's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Appen's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Mark Ronald Brayan (55yo)

4.5yrs

Tenure

AU$1,732,620

Compensation

Mr. Mark Ronald Gerard Brayan, MBA, has been the Chief Executive Officer and Managing Director of Appen Limited since July 13, 2015. Mr. Brayan served as the Chief Executive Officer and Managing Director  ...


CEO Compensation Analysis

Compensation vs Market: Mark Ronald's total compensation ($USD1.20M) is below average for companies of similar size in the US market ($USD3.86M).

Compensation vs Earnings: Mark Ronald's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.3yrs

Average Tenure

Experienced Management: APPE.F's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

4.8yrs

Average Tenure

58.5yo

Average Age

Experienced Board: APPE.F's board of directors are considered experienced (4.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$15,226,11124 Jul 19
Vinva Investment Management
EntityCompany
Shares1,081,801
Max PriceUS$14.07
SellUS$5,861,75624 Jul 19
Vinva Investment Management
EntityCompany
Shares351,359
Max PriceUS$16.68
SellUS$7,509,99218 Jun 19
William Pulver
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares392,819
Max PriceUS$19.12
SellUS$923,35512 Jun 19
Mark Ronald Brayan
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Executive Director
Shares50,000
Max PriceUS$18.47

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8%.


Management Team

  • Mark Ronald Brayan (55yo)

    MD, CEO & Executive Director

    • Tenure: 4.5yrs
    • Compensation: AU$1.73m
  • Kevin Levine

    Chief Financial Officer

    • Tenure: 4yrs
    • Compensation: AU$1.06m
  • Carl Middlehurst

    Company Secretary

    • Tenure: 0.9yrs
  • Becky Scott

    Chief Operating Officer of Figure Eight

    • Tenure: 0.8yrs
  • Jon Kondo

    Senior Vice President of Sales & Marketing

    • Tenure: 1yrs
  • Kerri Reynolds

    Senior Vice President of HR & Crowd Sourcing Operations

    • Tenure: 2.8yrs
  • Daren Jackson

    Senior Vice President of Innovation

    • Tenure: 1.6yrs
  • Tom Sharkey

    Senior Vice President of Client Services

    • Tenure: 1.5yrs
    • Compensation: AU$659.64k
  • Wilson Pang

    Chief Technology Officer

    • Tenure: 1.2yrs
  • Roc Tian

    Senior Vice President of China

    • Tenure: 1yrs

Board Members

  • Chris Vonwiller (76yo)

    Non-Executive Chairman

    • Compensation: AU$116.30k
  • Bill Pulver (59yo)

    Independent Non-Executive Director

    • Tenure: 7yrs
    • Compensation: AU$89.79k
  • Mark Ronald Brayan (55yo)

    MD, CEO & Executive Director

    • Tenure: 4.5yrs
    • Compensation: AU$1.73m
  • Deena Shiff (65yo)

    Independent Non-Executive Director

    • Tenure: 4.7yrs
    • Compensation: AU$76.25k
  • Steve Hasker (49yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: AU$76.25k
  • Robin Low (58yo)

    Independent Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: AU$91.25k

Company Information

Appen Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Appen Limited
  • Ticker: APPE.F
  • Exchange: OTCPK
  • Founded: 1996
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: AU$3.162b
  • Listing Market Cap: AU$2.175b
  • Shares outstanding: 121.11m
  • Website: https://www.appen.com

Number of Employees


Location

  • Appen Limited
  • 9 Help Street
  • Level 6
  • Chatswood
  • New South Wales
  • 2067
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
APXASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 2015
APXCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 2015
APPE.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 2015
433DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 2015

Biography

Appen Limited, together with its subsidiaries, provides data solutions and services for machine learning and artificial intelligence applications for technology companies, auto manufacturers, and government agencies in Australia, the United States, and internationally. It operates through two divisions, Content Relevance and Language Resources. The Content Relevance division offers annotated data used in search technology embedded in Web, e-commerce, and social engagement for enhancing relevance and accuracy of search engines, social media applications, and e-commerce. The Language Resources division provides annotated speech, natural language, and image data used in speech and image recognizers, machine translation, speech synthesizers, and other machine-learning technologies. The company was formerly known as Appen Holdings Pty Limited and changed its name to Appen Limited in October 2014. Appen Limited was founded in 1996 and is headquartered in Chatswood, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/20 00:43
End of Day Share Price2020/01/09 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.