Ann: Q2 FY24 Quarterly Activity Report and Appendix 4C, page-230

Appen stock upgraded by Canaccord on strong revenue rebound and cost focus


On Wednesday, Appen Ltd. (APX:AU) (OTC: APPEF) stock received an upgrade from Canaccord Genuity from Hold to Speculative Buy, with a revised price target set at AUD0.80, up from the previous AUD0.60. The upgrade comes after Appen's recent quarterly update, which showed a significant recovery in revenues towards the end of the quarter.

The company, known for providing high-quality data for machine learning and artificial intelligence, demonstrated resilience with revenue growth despite past reliance on its business with Google (NASDAQ:GOOGL). The analyst noted that Appen's focus on cost reductions is aiding the company's progress toward cash EBITDA breakeven in the upcoming months.

The positive shift in Appen's revenue trajectory was a key factor in the decision to raise the price target. The improved revenue outlook has led to an enhanced cash flow profile within the firm's discounted cash flow (DCF) analysis, which underpins the valuation method used to determine the new price target.

Appen's strategic moves to streamline operations and control costs have been highlighted as instrumental in the firm's turnaround. This financial discipline, coupled with the revenue recovery, has prompted the upgrade to a Speculative Buy rating.

The new price target of AUD0.80 reflects the analyst's increased confidence in Appen's financial future. The company's shares are now seen as having a more favorable outlook, with the expectation of continued improvement in their financial performance.