APX – Credit Suisse rates the stock as Initiation of coverage with Neutral

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The broker has initiated coverage of Appen, balancing a 5.1x 2019 revenue forecast with discounted cash flow to come up with a target of $23.00. This is close to the trading price so the broker begins on Neutral.

Valuation is full after a significant re-rate but the broker does not believe the business model is enjoying the high operating leverage potential of tech sector peers. Near term momentum appears to be to the upside but the broker remains alert for deteriorating industry structure.

Sector: Software & Services.

Target price is $23.00.Current Price is $23.82. Difference: ($0.82) – (brackets indicate current price is over target). If APX meets the Credit Suisse target it will return approximately -4% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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