Macro Intelligence: WiseTech Global soars to new highs with record growth

Article written by Juliette Saly (ausbiz)

Spotlight on WiseTech Global (ASX: WTC)

In this week’s edition of IG Macro Intelligence, we take a deep dive into WiseTech Global (ASX:WTC).

Smashing records

WiseTech Global develops and offers software solutions for the logistics execution industry globally, spanning the Americas, Asia Pacific, Europe, the Middle East, and Africa. It has a market capitalisation of $43.46 billion.

The logistics software company has become somewhat of an ASX market darling, with shares rising almost 100% in the past 12 months. Shares have risen around 75% year-to-date and recently soared to an all-time high of $134.40 per share following the company’s FY24 result.

WiseTech daily chart

CEO’s growing wealth

The surge has further boosted founder and CEO Richard White’s wealth, making him a billionaire. White, who owns 39% of WiseTech, saw his stake increase by approximately $3 billion over two days.

FY24 performance overview

For FY24, WiseTech posted a 28% rise in revenue to $1.04 billion, slightly below estimates. CargoWise revenue increased by 33% to $880.3 million.

EBITDA grew by 28% to $495.6 million, and underlying NPAT rose 15% to $283.5 million, surpassing the consensus estimate of $265.7 million. WiseTech’s final dividend payment was increased by 10% to 9.2 cents per share, reflecting a 20% payout ratio.

Forecasted revenue growth

For FY25, revenue is projected between $1.3 and $1.35 billion, representing an annual growth rate of 23.9%. This is significantly higher than the Australian market average of 12.3%.

It is being fuelled by expected strong demand for its logistics software solutions from major clients such as DHL and FedEx.

Projected revenue growth from 2024

Acquisition strategy

WiseTech Global is heavily investing in innovation and has allocated around $130 million to research and development. The company's growth has also been bolstered by an aggressive acquisition strategy, including the purchase of the US shipping container marketplace, MatchBox Exchange, in October 2023.

WiseTech yearly acquisition chart

Acquisition history and scale

Since 2015, WiseTech has completed 38 acquisitions, with an average deal size of $87.9 million. Its acquisitions span 23 countries, with the majority located in Australia and the United States. WiseTech’s most active acquisition year was 2018, during which it completed 15 acquisitions. Its most recent acquisition was the Portuguese software development and IT consulting company Singesta in July for an undisclosed amount.

A “wise” investment?

Since its listing at $3.41 in April 2016, WiseTech has experienced one of the most impressive growth trajectories in Australian tech. It is now the second most valuable tech stock on the ASX, behind only Block, the parent company of Square and Afterpay.

Stock performance and analyst ratings

Analyst recommendations and stock performance

WiseTech’s share price has surged tenfold from below $12 in March 2020, following a sustained short-seller attack and the economic disruptions caused by the pandemic.

So what do analysts think about future returns?

The mean recommendation on WTC is a HOLD, according to Refinitiv data. Of the 18 analysts surveyed on the stock’s outlook, 11 recommend holding, six suggest buying, and only one broker recommends selling WiseTech shares. Multiple indicators show WTC shares are in a bullish trend and could move higher.

Analyst recommendations and stock performance

Price targets from brokers

The average target price for the stock is $108.82, suggesting an 18% decline from recent highs.

Bulls at Morgan Stanley are confident about WiseTech’s outlook and lifted their price target on the stock by 26% to $120 in the wake of its FY result. The broker sees the launch of new major releases in the coming months as potential catalysts and says demand for its core platform still looks to be rising.

UBS has set a price target of $129, while at the other end of the scale, Citi values WiseTech at $90 per share.