WiseTech Global Ltd (ASX: WTC) shares are slipping today.
Shares in the S&P/ASX 200 Index (ASX: XJO) tech stock closed yesterday trading for $115.12. In afternoon trade on Wednesday, shares are swapping hands for $113.72 apiece, down 1.2%.
For some context, the ASX 200 is up 0.2% at this same time.
Despite today's retrace, WiseTech shares remain up 52.0% since hitting a one-year closing low of $74.83 on 4 April.
Longer term, shares in the ASX 200 tech stock are up 308% over five years.
So, with that recent share price surge in mind, is the stock still a good buy today?
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Should you buy or sell WiseTech shares?
Alto Capital's Tony Locantro recently ran his slide rule over the resurgent tech stock (courtesy of The Bull).
"WiseTech develops and provides software solutions to the global logistics industry," said Locantro, who has a sell recommendation on WiseTech shares.
He noted:
The company recently completed the US$2.1 billion acquisition of e2open, a US based company involved in cloud-based trade and supply chain solutions. The acquisition is fully debt funded from a new debt syndicated facility.
But after the big run up in the share price, Locantro believes the stock is trading at an elevated price-to-earnings (P/E) ratio.
"WiseTech shares have risen from $74.83 on April 4 to trade at $114.96 on August 14. WiseTech was recently trading on a lofty price/earnings ratio of 124 times," he said.
Locantro concluded, "Share price strength creates an opportunity to lock in some profits."
Why did WiseTech acquire e2open?
WiseTech shares grabbed plenty of attention on 26 May when the company announced it had entered into a binding agreement to acquire e2open for US$2.1 billion (AU$3.3 billion).
Management said the acquisition will materially increase WiseTech's global scale and reach, adding adjacent markets, customer bases, and product capabilities.
"Acquiring e2open is a strategically significant step in achieving our expanded vision to be the operating system for global trade and logistics," WiseTech founder and chief innovation officer Richard White said.
White added:
E2open brings to WiseTech several well established complementary products. This will enable WiseTech to create a multi-sided marketplace that connects all trade and logistics stakeholders to efficiently offer and acquire services, removing complex disconnected processes and driving visibility, predictability and cost savings through the value chain…
In bringing the two companies together, we see tremendous opportunity for synergies, efficiencies, economies of scale and enhanced customer benefits.
WiseTech shares closed up 4.7% on the day.
