WiseTech share price crashes following AGM and renewed JCAP attack

By late afternoon the WiseTech share price had fallen as much as 8.31%, following the company’s AGM and a new round of bearish tweets from JCAP – the firm that launched a brutal short attack on the company in September.

Overall, there were few surprises as part of today’s AGM: WiseTech didn’t upgrade their previous top or bottom-line guidance, but they did reaffirm it.

Here, WiseTech noted that it expected FY20 revenues of between $440 million to $460 million. This would imply growth of between 26% to 32%.

On the earnings front, the company flagged EBITDA of between $145 million to $153 million – implying a significant growth rate of between 34% to 42%.

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WiseTech share price: earnings quality in focus

A subtle jab at JCAP, WiseTech also took today’s AGM as an opportunity to reiterate the quality of firm's revenues, noting that in FY19 'for CargoWise One customers, our recurring revenue is 99% of total revenue, with 98% usage-based and our customer attrition rate remains well below 1% for the seventh year in succession.’

Yet maybe the market was expecting more: last week after all the WiseTech share price rose every single session. Jitters obviously mounted as the AGM neared, with WiseTech’s share price dropping 1% yesterday.

Even so, the opportunity in play here remains large.

WiseTech’s visionary CEO – Richard White – took today’s AGM to note that:

'With the addressable market in technology for global logistics in the hundreds of billion, and the spend on digital transformation itself hundreds of millions more again, we are moving fast to leverage these components and build out our technology lead.’

Maybe pre-empting further comments from JCAP, Mr White also said:

'While there are those who seek to distract, we will not be deterred, We know the work we do is important for the world and it is worth our relentless efforts.'

JCAP resumes their attack

JCAP got back into the game today – having not tweeted about WiseTech since October 24 and apparently undeterred by the significant opportunity that WiseTech is chasing.

What came was a deluge of mostly already released information and some vague comments concerning margin loans.

Overall JCAP hit mostly the same beats: WiseTech has misstated its organic growth figures, why did Director Christine Holman expedite her departure, and the particularly interesting tweet that 'our primary research indicates that up to 50% of acquired customers leave WiseTech post acquisition.'

One hopes that JCAP’s ‘primary research’ has expanded beyond a 13-person survey at this point.

Information flow distortion

Regardless of this, it’s hard to tell just how influential JCAP is at this point. There is, after all no new short report from their esteemed head-researcher. Maybe then it’s just WiseTech’s valuation that has finally caught up with the stock.

According to the ASX, WiseTech trades at 163 earnings. That’s steep even for a technology company with a significant growth ramp.