Ann: Trading update, cost reduction program and strategy refresh, page-163

Two conflicting views... lol

Appen's debt facility means the Australian data-annotation company should avoid the need for a capital raise, Bell Potter analyst Chris Savage says. He tells clients in a note that he thinks Appen will utilize some of its A$20 million facility in 2H FY 2023 and increase the size of facility when it refinances. He cuts his FY 2023, FY 2024 and FY 2025 revenue forecasts by 17%, 18% and 18%, respectively, on Appen's latest trading update. Bell Potter cuts its target price on the stock by 8.9% to A$2.05 and maintains a sell rating. Shares are 1.3% lower at A$2.26.

Australian data-annotation company Appen will likely need to raise capital unless it can identify further cost cuts, Macquarie analysts say in a note. They tell clients that a softening macro environment means they don't anticipate Appen returning to profit until 2026, which raises concerns over its capital position in 2024. Appen currently expects to exit 2023 in a neutral earnings position but the Macquarie analysts point out that it has only US$23 million of cash in the bank. They assume Appen will lean on US$150 million of debt for funding. Macquarie cuts the stock's target price by 53% to A$1.18 and lowers its recommendation to underperform from neutral. Shares are down 0.2% at A$2.285.