WiseTech Global Ltd (ASX: WTC) shares were out of form on Monday.
The logistics solutions company's shares sank deep into the red after the release of an update at its annual general meeting.
That update saw WiseTech downgrade its guidance for FY 2025 due to distractions flowing from the recent media attention over ex-CEO Richard White's behaviour and the organisational changes that have subsequently been implemented.
This has led to the delay of the commercial launch of its new Container Transport Optimization.
As a result of this delay, revenue and EBITDA are expected to be $1,200 million to $1,300 million and $600 million to $660 million, respectively, in FY 2025. The midpoint of these guidance ranges represents a downgrade of 5.7% and 7.4%, respectively, from its previous guidance.
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Should you buy WiseTech shares?
Analysts at Bell Potter think that the selloff has created a buying opportunity for investors.
This morning, the broker has reiterated its buy rating and lifted its price target to $140.00 (from $123.75).
Based on its current share price of $121.74, this implies potential upside of 15% for investors over the next 12 months.
Commenting on the update, the broker said:
We have downgraded our revenue forecasts by 4%, 4% and 3% in FY25, FY26 and FY27. We note the delay in the release of Container Transport Optimisation just pushes back the expected revenue from this products by several months so is not lost, just delayed. We have also downgraded our EBITDA forecasts by 6%, 5% and 4% which is mostly driven by the revenue downgrades but also a modest reduction in our margin estimates.
Overall, we do not consider the update bad all things considered and see the upcoming investor day as a potential catalyst for the share price.
Goldman Sachs agrees with this view. This morning, the broker has responded to the update by retaining its buy rating and $138.00 price target. It explains:
We update estimates to reflect the delayed product launch into late 2H25, but also moderate our product attach assumptions through FY25-26. This still drives a meaningful acceleration in revenue growth into FY26 (i.e. CW revenue growth of +26%/+32% in FY25/26, group revenue +21%/+28%), but lowers our EBITDA -7%/-5%/-5% across FY25-27E.
Despite these earnings downgrades, our 12m TP of $138 is unchanged, given re-rating in key SaaS peers driving our applied multiple to 54X FY26 EBITDA (prior 51X). We look for greater details around the revised guidance and product outlook at the Investor Day on Dec 3.
