Artificial intelligence (AI) is at the core of the current technological transformation. Using the TipRanks Stock Comparison tool, we have picked up two AI shares, Appen Limited (AU:APX) and Bigtincan Holdings (AU:BTH), from the Australian market to compare and pick a better investment.
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As the sector is witnessing huge growth, the companies are exposed to higher competition, and the share prices remain volatile. Amid the rush of investments in AI stocks, it is really important for investors to make an informed decision after analyzing the long-term prospects.
Let’s have a closer look at them.
Appen Limited
Appen is a leading provider of data solutions for machine learning and AI applications. The company mainly caters to the technology, government, and automobile sectors.
In February, the company announced its 2022 annual earnings, highlighting weaker revenues and a grim outlook. The revenue for 2022 was down 13% to $388.5 million as compared to 2021. The underlying earnings were hit hard and went down 83% to $13.6 million. The company stated that this year has started on a dull note and that the first-half earnings for 2023 will be further lower. The company also backed out of its revenue target of 23% growth over the next three years.
On the plus side, Appen will generate $10 million in savings annually starting from the second half of 2023. The company is also targeting to ride the AI wave by investing more in its product development. It expects to invest 10% of its revenues in 2023 into new products, which could push the top-line growth.
Analyst Garry Sherriff from RBC Capital feels investors would need more assurance on the company’s long-term strategy before forming an investment opinion. Sherriff has a Sell rating on the stock with a forecasted downside of 3.17%.
Appen Share Price Target
Appen’s stock has lost more than 55% of its value in the last year. However, the last three months gave some relief to its shareholders after it gained almost 25%.
According to TipRanks’ rating consensus, APX stock has a Strong Sell rating, based on five Sell and one Hold recommendations.
The average target price is AU$2.25, which is 20.8% lower than the current price level.
Bigtincan Holdings Limited
Based in Australia, Bigtincan is a software company that provides an AI-powered sales automation platform. The company also offers various other application tools and platforms.
Similar to Appen, Bigtincan’s stock has also been trading down by more than 50% in the last year. BTH stock has been on a downward trajectory since November 2022, when U.S.-based SQN investors made an offer to acquire the company for AU$0.80 per share in cash. Bigtincan has yet to make a final decision on this offer.
In its recently announced business update, the company assured its shareholders of higher returns and said it remains committed to its strategic plan. For the first half of 2023, the company posted a 31% increase in its revenue and an 88% jump in its gross margins.
Moving ahead, the company stated that it is on track to achieve its financial guidance for full-year earnings in 2023, which ends in June. The growth will be driven by new products launched, the M&A program, and new customer additions.
Bigtincan Holdings Share Price Target
BTH stock has a Moderate Buy rating in TipRanks based on two Buy recommendations.
The average price target is AU$1.05, which implies an upside of 162.5% from the current price level.
Conclusion
Among these two Australian players, BTH offers more growth potential to investors, along with a Moderate Buy rating from analysts.
As for APX, investors are still awaiting further announcements in its strategic review due in May 2023. Investors also expect the new CEO, Armughan Ahmad, to turn things around for the company.
