WiseTech Global Ltd (ASX: WTC) shares were under pressure on Wednesday following the release of its results.
The logistics solutions company's shares ended the day 12% lower at $102.02.
Was this an overreaction? Let's see what analysts at Bell Potter are saying about the company after the selloff.
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What is Bell Potter saying?
Bell Potter notes that WiseTech delivered revenue a touch short of expectations in FY 2025. However, its earnings outperformed thanks to stronger than forecast margins. It explains:
FY25 revenue of US$778.7m was 2% below our forecast of US$795.3m and missed the guidance range of US$792-858m. Statutory and underlying EBITDA of US$381.6m and US$409.5m, however, were 4% and 1% above our forecasts of US$381.6m and US$409.5m. The beat at EBITDA was obviously driven by a higher-than-expected margin and the underlying EBITDA margin of 52.6% was above our forecast of 51.0% and above the guidance range of 50-51%.
And while the company's guidance for FY 2026 was below expectations, this was because of accounting changes. Digging deeper into things, Bell Potter said:
The FY26 guidance is revenue b/w US$1.39-1.44bn, EBITDA b/w US$550-585m and EBITDA margin b/w 40-41%. The guidance was below our forecasts at every measure but the difference at EBITDA was largely explained by the use of an IFRS rather than adjusted EBITDA for e2open – which was a US$48m difference in FY25 – and one-off costs of US$45-50m from the integration of e2open. After adjusting for these two areas our original FY26 EBITDA forecast was slightly above the top of the range.
Are WiseTech shares a buy after the selloff?
According to the note, Bell Potter thinks investors should be taking advantage of this selloff to load up on shares.
In response to the results, the broker has retained its buy rating with a reduced price target of $127.50 (from $135.00).
Based on its current share price, this implies potential upside of 25% for investors over the next 12 months.
Bell Potter believes that its investment thesis for WiseTech remains intact. It concludes:
In our view the investment thesis and positive outlook on WiseTech remains intact despite the slightly disappointing guidance. Accordingly we have increased the multiples we apply in the PE ratio and EV/EBITDA valuations from 95x and 50x to 115x and 52.5x but there is no change in the 8.3% WACC we apply in the DCF. The net result is still a 6% reduction in our price target to $127.50 which is >15% premium to the share price so we maintain our BUY recommendation.
