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Why WiseTech shares are tanking today

Wisetech Global Ltd (ASX: WTC) shares are down 10 per cent today despite the software-as-a-service (SaaS) player confirming it’s on track to deliver EBITDA between $145 million to $153 million on sales between $440 million to $460 million over fiscal 2020.

If achieved this would equal growth up to 42% and 32% respectively as the SaaS business model boasts some good operating leverage where revenues can rise faster than often fixed costs.

The shares are probably sliding though on the back of some investor disappointment that Wisetech has not upgraded guidance.

Elsewhere, the world’s most impertinent short seller in J Capital has taken to Twitter today to launch insults and accusations against the group’s integrity and financial reporting. 

In the share market sentiment is a big driver of share prices on a daily basis, with today’s falls the result of lingering concerns around its financials and the credibility of its acquisitive growth strategy. 

WiseTech also trades on an excessively high valuation using conventional valuation metrics. As such sharp pullbacks in its share price should be no surprise to investors. 

Others hot tech shares that might be better bets on current valuations, include Xero Limited (ASX: XRO) and Altium Limited (ASX: ALU). Both are delivering strong organic growth with decent long-term outlooks in my view. 

These 3 stocks could be the next big movers in 2020

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Motley Fool contributor Tom Richardson owns shares of Altium, WiseTech Global, and Xero. The Motley Fool Australia owns shares of Altium, WiseTech Global, and Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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