The Appen Ltd (ASX: APX) share price was among the best performers on the S&P/ASX 200 Index (ASX: XJO) last month.

The artificial intelligence company’s shares stormed over 19% during the month. This stretched their year to date gain to a very impressive 39%.

Why did the Appen share price rocket higher last month?

Investors have been fighting to get hold of Appen’s shares since the middle of April when it released a trading update.

That update revealed that demand for its services remains strong despite the global pandemic.

Appen is a leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). Through its team of over a million crowd-sourced experts, the company prepares the data that goes into the AI and machine learning models of some of the biggest tech companies in the world.

In light of this strong demand, the company remains on track to achieve its guidance in FY 2020.

It expects to achieve underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) in the range $125 million to $130 million. This represents a 23.8% to 28.7% increase on FY 2019’s underlying EBITDA of $101 million.

It also suggested that there is upside risk to its guidance due to a number of factors. These include a weaker Australian dollar, an increase in available crowd workers, and an increase in pandemic-led use of search, social media, and ecommerce platforms.

And while it has also warned that there are downside risks, I believe the real risk is to the upside. And judging by the Appen share price performance, the market does as well.

Is it too late to invest in Appen?

Although the Appen share price has been on fire this year, I don’t believe it is too late to buy its shares if you are investing with a long term view.

Due to the growing importance of AI and machine learning and its leadership position, I believe Appen can deliver strong growth over the next decade.

In light of this, I believe it is one of the buy and hold options on the market right now along with fellow tech share Altium Limited (ASX: ALU).

More reading

• 3 five-star ASX 200 shares to buy in June
• ASX 200 down 1.2%: Westpac tumbles, Appen reaffirms guidance, Costa CEO to retire
• Appen share price falls after positive update fails to impress
• 10 quality ASX shares to buy in June
• Forget day trading: Get rich with these top ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium and Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post The Appen share price smashed the market in May: Is it too late to buy? appeared first on Motley Fool Australia.

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Sezzle Inc (ASX: SZL) could be one of the sleeper ASX growth shares to watch in 2020. It is a US based, buy-now-pay-later (BNPL) fintech that has seen its share price rise by 489% since 23 March. Sezzle has a number of benefits over its BNPL stablemate Afterpay Ltd (ASX: APT). 

About Sezzle

Sezzle’s location as a United States-based fintech immediately exposes it to the largest potential BNPL market in the world. With a US$5.4 trillion dollar retail market, the US makes Australia’s trading environment look like small beer. In addition, as a US-based operator, Sezzle doesn’t have to deal with the continual regulatory threats that Afterpay faces.

Afterpay is also up against stiff opposition from Klarna, a Commonwealth Bank of Australia (ASX: CBA) backed competitor. In the US and Canada there is no single entity with the size or relative scale the Commonwealth Bank has in Australia.  

Sezzle boasts 1.3 million users and 14.9 thousand merchants. It has also secured a credit facility worth US$100 million. In addition, the company is already looking northward to the US$460 billion Canadian retail market. 

Afterpay holds prime position on the ASX with a market cap of over $12 billion. Yet both of Sezzle’s markets are larger than the Australian market. 

BNPL fintech demographics

Like fellow BNPL fintechs Afterpay and Zip Co Ltd (ASX: Z1P), Sezzle also targets the Gen Z and Millennial consumer demographics. These groups are tech savvy and make up the largest slice of all age demographics in the US. Sezzle estimates Gen Z will hold 25% of total spending power in 2020. 

The company allows this demographic to control their spending, while giving them access to goods and services they would be unable to purchase with limited disposable income. 

Foolish takeaway

The fintech sector has seen some of the fastest growing ASX shares this year. I believe a number of our best performing shares over the next decade will also be in this sector. Sezzle has a number of natural advantages over its much larger rival, Afterpay, and therefore I think this company deserves a place on your watchlist.

More reading

• How bankable are the big four ASX bank shares in 2020?
• Why Nearmap’s share price surged by 50% in May
• Openpay share price surges 29% higher after BNPL provider reports record month
• Real wealth from 3 roaring mid caps in May
• Afterpay share price rockets 50% in May, is it in the buy zone?

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has seen some strong share price gains over the past month. General market sentiment continues to rise. The Aussie tech sector, in particular, Nearmap Ltd (ASX: NEA) performed strongly with its share price surging 50% higher in May.

Other strong performers include Afterpay Ltd (ASX: APT) which has seen its share price up by 54% and Pushpay Holdings Ltd (ASX: PPH) which saw a massive 69% share price rise.

However, few ASX tech shares have managed to grow at such phenomenal rates.

So, what is behind the recent strong growth of Nearmap’s share price?

Nearmap’s strong subscriber growth continues

Nearmap has performed well during the last few months, as it continues to grow its subscriber base at a solid rate. In addition, its average revenue subscription continues to improve. This is further improving its overall margins. In particular, it has been growing strongly in the North American market.

A series of positive market updates in April and May, in particular, has encouraged investors.

In a May update, the company informed the market that its recent business performance has been very solid.

Month-to-month recent sales growth has been strong across its key market segments. This is despite challenging market conditions.

Actual cash value (ACV) for Nearmap’s overall portfolio was reported to be over $102 million. A strong result.

There has been some downward sales growth momentum. This is due to some customers delaying their purchasing decisions. However, the overall impact on its sales pipeline has been negligible.

Customer churn has pleasingly been declining. It was reported to now be below 10% on a 12-month rolling basis. This is down from 11.5% at the end of last year.

New artificial intelligence (AI) product set to launch this month

In another positive market update, Nearmap indicated that its new artificial intelligence (AI) product would be launched this month.

The AI product will target a range of industries including insurance, utility and local government. This follows the successful launch of its 3D and rooftop geometry products.

On track to reach break-even target

In a previous market announcement in April, Nearmap indicated a number of cash-management initiatives. These are aimed at reducing operating and capital costs by 30% and achieving a break-even target by the end of June.

In its latest update last week, Nearmap indicated that it is currently on track to achieve this goal. This also seems to have pleased the share market.

More reading

• How bankable are the big four ASX bank shares in 2020?
• This ASX fintech share is up 489% since March
• Openpay share price surges 29% higher after BNPL provider reports record month
• ASX 200 up 0.6%: NAB charges higher, ACCC investigates Qantas acquisition
• Real wealth from 3 roaring mid caps in May

Motley Fool contributor Phil Harpur owns shares of AFTERPAY T FPO and Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Nearmap’s share price surged by 50% in May appeared first on Motley Fool Australia.

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