Fact based stock research
Appen (ASX:APX)
AU000000APX3
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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
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Appen stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Appen (IT Consulting & oth. Services, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Appen are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives), and are riskily financed (Safety Rank of 34, which means above-average debt burdens) but show above-average growth (Growth Rank of 69). ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Appen's financial characteristics. As the company Appen shows low value with an Obermatt Value Rank of 41 (59% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 69% of comparable companies (Obermatt Growth Rank is 69). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 34 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Appen, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Appen
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 87 |
|
75 |
|
69 |
|
41 |
|
| GROWTH | ||||||||
| GROWTH | 14 |
|
23 |
|
1 |
|
69 |
|
| SAFETY | ||||||||
| SAFETY | 76 |
|
61 |
|
63 |
|
34 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
39 |
|
6 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
51 |
|
13 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Appen (IT Consulting & oth. Services, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Appen are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives), and are riskily financed (Safety Rank of 34, which means above-average debt burdens) but show above-average growth (Growth Rank of 69). ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Appen's financial characteristics. As the company Appen shows low value with an Obermatt Value Rank of 41 (59% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 69% of comparable companies (Obermatt Growth Rank is 69). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 34 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Appen, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 87 |
|
75 |
|
69 |
|
41 |
|
| GROWTH | ||||||||
| GROWTH | 14 |
|
23 |
|
1 |
|
69 |
|
| SAFETY | ||||||||
| SAFETY | 76 |
|
61 |
|
63 |
|
34 |
|
| COMBINED | ||||||||
| COMBINED | 57 |
|
56 |
|
37 |
|
42 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Appen shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Appen. Price-to-Sales (P/S) is 74, which means that the stock price compared with what market professionals expect for future sales is lower than for 74% of comparable companies, indicating a good value concerning Appen's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 100% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 1 (dividends are expected to be higher than for 1% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 54% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Appen to 46. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Appen's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 69 |
|
70 |
|
95 |
|
74 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 76 |
|
79 |
|
100 |
|
100 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 60 |
|
85 |
|
100 |
|
46 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 68 |
|
52 |
|
25 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 87 |
|
75 |
|
69 |
|
41 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 69 (better than 69% compared with alternatives), Appen shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Appen. Profit Growth has a rank of 77, which means that currently professionals expect the company to grow its profits more than 77% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 100 (above 100% of alternative investments). But Sales Growth has a below the median rank of 40, which means that, currently, professionals expect the company to grow less than 60% of its competitors, and Capital Growth also has a lower rank of 4. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 69, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Appen. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 34 |
|
47 |
|
4 |
|
40 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 60 |
|
18 |
|
1 |
|
77 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
61 |
|
1 |
|
4 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 6 |
|
15 |
|
1 |
|
100 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 14 |
|
23 |
|
1 |
|
69 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Appen has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Appen is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Appen.Leverage is at 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors.Refinancing is at a rank of 61, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 61% of its competitors. Liquidity is at 6, meaning that the company generates less profit to service its debt than 94% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Appen has a financing structure that is riskier than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for Appen more challenging. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 58 |
|
73 |
|
74 |
|
56 |
|
| REFINANCING | ||||||||
| REFINANCING | 56 |
|
58 |
|
90 |
|
61 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 78 |
|
40 |
|
14 |
|
6 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 76 |
|
61 |
|
63 |
|
34 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
42 |
|
1 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
50 |
|
34 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
59 |
|
20 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
27 |
|
13 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
39 |
|
6 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Appen from December 19, 2024.
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