The Appen Ltd (ASX: APX) share price is dropping during early afternoon trade on Monday. This comes despite no new news being released by the artificial intelligence data services company.
At the time of writing, Appen shares are fetching for $12.24, down 2.47%. In comparison, the S&P/ASX 200 Index (ASX: XJO) touched an all-time high of 7,549 points, up 0.1%.
What’s going on with the Appen share price?
It appears investors are taking some profit off the table after Appen shares bounced 8% higher last week.
The company’s share price has been hit hard by the onslaught of COVID-19, falling 67% since this time last year.
In May, Appen delivered a trading update and announced a restructure to focus on its core business interests. Instead of reporting the usual double-digit growth however, the company is expecting a mid-to-high single-digit increase for FY21.
In addition, Appen shares were kicked out of the ASX 100 Index as its market capitalisation sank, making way for Harvey Norman Holdings Limited (ASX: HVN).
The United States dollar is also weighing in on Appen’s bottom line. The company traditionally reports in US dollars as most of its revenue is derived from there. However, with the Australian currency rising against the greenback, this will deflate Appen’s potential earnings. Currently, US$1 buys A$1.36.
Appen is scheduled to report its financial results for FY21 on 26 August 2021.
Is Appen shares a buy?
The most recent broker note came from Bell Potter in mid-June. The investment firm cut its 12-month price target by 5.3% to $13.50 for Appen shares. Based on the current share price, this implies an upside of around 9%.
The post Appen (ASX:APX) share price drops after a fantastic week appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras owns shares of Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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