The WiseTech Global Ltd (ASX: WTC) share price is having an incredible year.
Since the start of 2023, the ASX 200 tech share is up a remarkable 52%.
Impressively, that's despite a reasonable pullback by the logistics solutions company's shares during the recent market volatility.
Where next for this ASX 200 tech share?
The team at Goldman Sachs has been running the rule of WiseTech Global this month.
And while the broker is a big fan of the company and believes it has a strong competitive position, it feels that the tech share is trading at about fair value now.
According to the note, the broker has retained its neutral rating and lifted its price target by 37% from $60 to $82. This implies a potential upside of just over 5% from current levels, which isn't a compelling enough risk/reward to warrant a better rating.
Commenting on recent acquisitions, the broker said:
Incorporating these acquisitions & stronger organic growth, we revise higher EBITDA +0-11%, now forecasting a FY23E-26E group Rev/EBITDA CAGR of +27%/+30% – with US landside contributing c.11% of this rev growth. Although we are more positive (vs. consenus) on revenues and hence EBITDA (+1-4% vs. consensus) we assume a step up in investment in customs coverage/landside so are more cautious on margins (-172bps to 48.7% in FY24E, -163bps vs. cons.) Given these earnings raises and peer re-rating since Feb-23, we revise higher our WTC TP to $82 (from $60, reflects 30% EBITDA CAGR and 1.7X peer growth adjusted multiples).
Goldman then tackled its valuation, noting that it was one of the most expensive ASX 200 tech shares under coverage. It concludes:
WiseTech is a global provider of logistics software for the freight forwarding industry across 165+ countries. While we are positive on the company's strong competitive position, productivity benefits from CargoWise software, near-term industry tailwinds from increased M&A and emerging customs/landside solutions, WTC trades at a significant premium to our Technology peer set. Hence, with balanced risk/rewards we are Neutral rated.
