The Appen Ltd (ASX: APX) share price has continued its positive run and climbed 5.5% on Friday to reach a new all-time high of $19.07.
This latest gain means that the Appen share price has risen a staggering 48% since the start of 2019 and 93% over the last 12 months.
Why is the Appen share price at an all-time high today?
Investors have been snapping up the shares of the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence ahead of its full year results release on Monday.
Investors appear confident that Appen is going to follow the lead of Altium Limited (ASX: ALU) and deliver another impressive result.
What is the market expecting?
Appen is not widely followed by brokers, so understanding what the market is expecting is not easy.
But what we do know is that in the middle of November Appen upgraded its full year underlying EBITDA guidance to be in the range of $62 million to $65 million.
This compares to previous guidance of underlying EBITDA in the range of $54 million to $59 million and will be an increase of between 120% and 131% on FY 2018's underlying EBITDA of $28.1 million.
Whilst this growth is extraordinary, it is worth noting that not all of it will be organic. In December of last year the company completed the $105 million acquisition of the Leapforce business.
Leapforce is a California-based specialist in search relevance with a highly automated, proprietary end-to-end technology platform. Prior to its acquisition, management advised that in the 12 months to December 31 2017, the business was expected to generate revenue of US$58 million (A$82 million) and US$13.6 million ($19.2 million) in EBITDA.
What now?
I'm expecting a strong result from Appen when its releases its result on Monday, but I wouldn't expect it to smash its upgraded guidance as there wasn't much time left in the financial year for it to do so.
But with demand for its services expected to grow strongly over the next decade due to the increasing importance of machine learning and artificial intelligence, I suspect it could provide a very positive outlook for FY 2019.
Overall, whilst I wouldn't necessarily recommend buying shares ahead of its release, especially after what happened with WiseTech Global Ltd (ASX: WTC), I do believe it has the hallmarks of being one of the best buy and hold options on the local market.
