The Appen Ltd (ASX: APX) share price has been one of best performers on the Australian share market this year with a gain of 61%.
This compares to the ASX 200 and its year to date decline of just over 6%.
Why is the Appen share price up 61% this year?
A good portion of its gain has come in recent weeks following the release of a positive trading update.
That update revealed that the developer of high-quality, human annotated datasets for machine learning and artificial intelligence has continued to experience strong demand for its services in recent months.
This has led to a sharp increase in monthly revenues from existing projects from existing customers. As a result, management raised its underlying EBITDA guidance to the range of $62 million to $65 million in FY 2018.
This compares to its previous guidance of between $54 million and $59 million and will be a 120% to 131% increase on FY 2017's result.
While some of this year's EBITDA is being generated by the Leapforce business which was acquired late in 2017 for US$80 million, the majority of its growth is organic.
Is it too late to invest in Appen?
I don't believe it is too late to invest in Appen's shares. After all, management believes strong tailwinds are fuelling a need for AI data. And due to its global presence and industry-leading status, it believes it is strongly positioned and executing well.
Furthermore, at 29x estimated FY 2019 earnings, I think Appen is arguably the best value share in the WAAAX group right now ahead of Altium Limited (ASX: ALU) and Xero Limited (ASX: XRO).
All in all, I think this could make it worth taking advantage of any selling in the tech sector today to pick up shares with a long term view.
