The ASX tech share WiseTech Global Ltd (ASX: WTC) has plunged close to 40% from its peak, as the chart below shows. Sometimes, these large declines can be opportunities for brave investors.
Sitting here after reporting season and a trade war decline of the share market, the price/earnings (P/E) ratio has significantly reduced.
I'm not on WiseTech's board, so I'm not well-placed to comment on the company's governance issues. However, the ASX tech share has continued to achieve solid financial results.
Let's remind ourselves what the company reported for the first six months of the FY25 result and consider how this impacts WiseTech shares.
Earnings recap
In the half-year result to 31 December 2024, total revenue rose 17% to US$381 million, underlying profit (EBITDA) grew 28% to US$192.3 million, underlying net profit after tax (NPAT) grew 34% to US$112.1 million, and statutory net profit rose 38% to $106.4 million.
The logistics software company said that CargoWise's revenue rose by 21% to $331.7 million, driven by customer growth, including large global freight forwarder (LGFF) rollouts. CargoWise's customer penetration momentum continued with two new top 25 LGFF wins, with Nippon Express and LOGISTEED secured after the first-half result.
The strong profit growth allowed the business to hike its interim dividend per share to 6.7 cents, while free cash flow grew by 22% to US$124.1 million.
However, the company also warned that it's expecting revenue to be at the bottom of its guidance range due to further delays to the rollout of its three 'breakthrough' products.
In summary, profit is still growing at a good pace, though revenue growth could slow in 2025.
Let's look at what one expert thinks of WiseTech shares right now.
UBS's view on the ASX tech share
The broker UBS said that after seeing the result, it believes the medium-term growth outlook is "still intact." In a note, UBS said:
We maintain our buy rating on WTC despite further product delays. In reality the delay in Container Transport Optimisation (CTO) is relatively minor given it is a complex product and we are forecasting revenues of c.US$1.1bn by FY32e. CTO is also integrated into the CW1 portal so can be rolled out quickly once launched. We maintain our Buy rating as we remain positive on WTC's medium-term growth (3yr FY25-28e sales/EBITDA CAGR of 27%/33%). In this regard, we see valuation as appealing, with WTC trading on 20x 2yr forward sales.
UBS has a price target on WiseTech shares of $145. That implies the ASX tech share could rise by 71% in the next year if the broker is right about where the share price could trade in the next 12 months.
It's currently valued at 91x FY26's estimated earnings.
