APX -28.70%: This has been a polarising stock in recent times with some analysts forecasting downgrades while others doubled down and increased their conviction on the buy side, today the stock fell ~30% after missing FY21 earnings expectations and pulling FY22 guidance, in favour of longer term revenue targets which were big, a lot bigger than anyone in the market expected, however FY26 is a long way out into the never never. We were hopeful of a better outcome today but alas, the bearish camp led by Macquarie were right, and the stock fell hard. On the conference call it was clear that only analysts with a positive stance on the stock were engaging – Barrenjoey who had a buy equivalent and $15.40 PT remains optimistic as were Citi & Jeffries. While I got off the call thinking that Appen does have a good future, the next couple of years are going to be challenging, their visibility on the business is simply not there and that’s a function of their customers (big US tech mainly) going through rapid changes – hence why they have scrapped shorter term guidance. We had a 3% position in APX in the Flagship Growth Portfolio which we cut for a loss.
MM is now neutral APX, cutting the position from our Growth Portfolio
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