The WiseTech Global Ltd (ASX: WTC) share price has jumped 5.44% higher on Thursday afternoon to $19.58, however, still remains around 6% lower over the past week.
This comes after a disappointing EBITDA result that saw its market cap sink 18.6% since the day before the company's half-year earnings announcement on February 20.
This was an unfortunate result, but it may have put WiseTech back on the radar for investors who avoided its eerily high price.
Is now a good time to buy WiseTech shares?
WiseTech's flagship product, CargoWise One, is an end-to-end software solution for the logistics industry. It enables seamless interactions between users along the freight chain and now services over 8,000 businesses across 130 countries.
For the last five years, WiseTech has boasted impressive metrics – a 99% recurring revenue rate and a customer attrition rate of below 1%. Its product is sticky with little to no criticism of the underlying business.
WiseTech has kept busy with acquisitions of logistics solution companies across America, Europe, and Asia while retaining a strong cash position. This week it announced its $92 million acquisition of Singaporean company, Containerchain, a market leader for containerised solutions in Australia, New Zealand, and Singapore. While some may find the strategy questionable, I believe this is a cheap way to accelerate the company's global geographic foothold strategy.
The company is expanding its revenue channels with a new product that will launch next year, the CargoWise Nexus. Currently in beta testing, it adopts core aspects of the flagship CargoWise One, and will allow exporters and shippers to plan, book and track cargo shipments in real-time. WiseTech is expanding its international revenue channels.
Foolish Takeaway
Revenue soared 68% to $156.7 million in the first half of the year. This cleared analyst expectations, with CEO Richard White upgrading projections from 44% to 50% growth, to 45% to 51%.
It was earnings before interest, tax, depreciation and amortisation that was the black sheep – up just 51% to 48.5 million. Investors expecting an upgrade here were met with disappointment.
Unfortunately for Wisetech, it broke its streak of outperforming market expectations during this earnings season. Though its results weren't a disaster, a 103x earnings multiple means investors and analysts expect nothing shy of perfect. Especially since the market had already priced in an increase in WiseTech's full-year guidance.
Is the WiseTech share price a buy? The company is considered one of the most expensive tech companies in the world on a price-to-earnings basis, but it's hard to deny it's still poised for stellar growth.
