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Key points
- Appen used to be a high-growth WAAAX share market darling
- The company has had a stunning fall from grace
- When will the tide turn for Appen?
It certainly hasn't been a great month for most ASX shares. As my Foolish colleague Bernd covered today, the S&P/ASX 200 Index (ASX: XJO) has officially slipped into correction territory. This is defined as a 10% or more drop from the most recent high. But it has been an especially punishing time to own Appen Ltd (ASX: APX) shares.
The Appen share price is down by 17.6% in January alone, despite a 5% gain today. The company's shares have fallen by a horrible 60% over the past 12 months on the ASX.
Not only that, Appen is also down close to 77% from its all-time high of $40 reached in August 2020. Currently, the Appen share price is $9.18.
It's a stunning fall from grace for what used to be one of the market's most exciting growth shares.
Appen is (or at least was) a member of the WAAAX group of ASX shares. Like its fellow WAAAXers Afterpay, WiseTech Global Ltd (ASX: WTC), Xero Limited (ASX: XRO) and Altium Limited (ASX: ALU), Appen used to be a top pick for those wanting exposure to companies at the forefront of the ASX tech sector.
While some WAAAX shares have gone to new heights since 2020, and Afterpay has been acquired, the Appen share price remains in the dirt.
So what's in store for the annotated dataset provider? After this 77% fall, is the bottom finally here?
Is the Appen share price in the buy zone?
Well, one broker who thinks it might be is Citi. As my Fool colleague James covered last week, Citi has retained a buy rating on Appen shares. However, it has pared its 12-month price target down to $14.80 a share. Even so, if Appen were to hit that share price over the next year, it would represent a 61% gain.
Citi is bullish on Appen because it reckons the company has a fair chance of achieving its FY21 guidance. Therefore, it estimates that ASX investors might be too pessimistic about Appen shares. No doubt Appen's long-suffering investors will be keeping their fingers crossed that this turns out to be the case.
At the current Appen share price, this company has a market capitalisation of $1.1 billion. Its dividend yield is 1.12%.
