Wisetech Global Ltd (ASX: WTC) is another local technology stock caught up in the recent sector shakeout, with investors apparently nervous about the impact of AI on future earnings across the board.
The company's shares are currently trading at $49.28 and are well down on the $127.39 they were fetching around this time last year.
So are the shares, which are trading not far off their 12-month lows, a bargain?
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AI a blessing, not a curse
The team at Macquarie seem to think so, this week issuing a research note to their clients with a bullish share price target of $94, arguing that the company has the "most defensible" position in the Australian technology sector, and that it stands to benefit from AI rather than suffer.
One of the key elements in the company's favour, the Macquarie team says, is that Wisetech's CargoWise offering is "an entrenched vertical operating system with proprietary data, reinforced by huge R&D scale'', not just a run-of-the-mill software as a service business.
The Macquarie team said, "We think WiseTech (WTC) has a defensible position for perceived future AI competition'', and said there was the potential for the company to grow through acquisition as it has done in the past.
The Macquarie team added:
Execution risks are commensurate with the size and deliverability of a massive market opportunity, which is fully priced. Conversely, AI upside is not priced, and we see scope for earnings per share beats in 1H26 despite lower visibility.
Jarden analysts released their own report into Wisetech in mid-January, and while they're not so bullish on the stock, they still believe it can increase handily with a price target of $74.
The Jarden team, in a preview of the company's half-year results, noted that Wisetech has a history of surprising the market, both positively and negatively, but is forecasting revenue growth of 70% to US$649 million for the half.
Things that could drive better-than-expected results included a faster rollout of the CargoWise product to existing customers and new contract wins.
Jarden said they believed Wisetech's operating cost guidance could also be conservative.
Wisetech itself last reaffirmed its guidance at its annual general meeting in November, with revenue expected to be US$1.39 to US$1.44 billion, which would be a 79% to 85% increase over the previous year.
Wisetech is scheduled to release its half-year results on 25 February.
The company was valued at $16.56 billion at the close of trade on Monday.
