Company Overview: Appen Limited (ASX: APX) is a technology company enabling organisations to launch artificial intelligence (AI) systems. The company has more than 25 years of experience in data sourcing, data annotation, and model evaluation. Its products and services aid governments as well as players in the technology, automotive, financial services, retail, and healthcare space.

Financial & Operational Highlights - Appen Limited (‘Sell’ at AUD 3.96 current market price per share as on 5 June 2023)

• APX provided trading update for the four-month period ended 30 April 2023, registering revenue of USD 95.7mn and gross profit of USD 35.8mn.
• During mid-May, APX announced an equity raising program for ~USD 60mn, aimed at supporting its strategic refresh and return to profitability. The strategic refresh is focused on addressing key focus areas, including customer diversification, margin improvement, revenue visibility, and return on investment.
• FY22 performance was impacted by a lower contribution from the global division. However, 2HFY22 revenue jumped by 12% from 1HFY22 figures. The second-half revenue was supported by growth in revenue from the company’s second largest customer under the global services category.
• The company expects to exit FY23 with a return to underlying EBITDA and underlying cash EBITDA profitability on an annualised, run-rate basis.

APX Daily Chart

Given the adverse movement in foreign exchange price, risk related to general global economic and market conditions, current trading levels, and the achievement of resistance level, it is prudent to book profits, therefore a 'Sell' recommendation is given on the stock at the current price of AUD 3.96 (as of June 5, 2023, at 10:05 AM GMT+10).

Note: This report may be updated with details around fundamental and technical analysis, price/ chart in due course, as appropriate.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is June 5, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.

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