The Wisetech Ltd (ASX: WTC) share price is looking pretty battered at the moment, having fallen 65.5% over the past year and is well down on the 12-month high of $117.79.
The stock is currently changing hands for just $39.91, begging the question, is the next move up?
The team at Macquarie has got in ahead of the company reporting its full-year results on 26 August and has an outperform rating on the stock and a bullish share price target, which we'll get to shortly.
First, let's look at some of the fundamentals of the business and why it has been performing so poorly.
Image source: Getty Images
Global reach a positive
Wisetech develops and sells software solutions for the logistics, global trade, and supply chain industries worldwide, with more than 22,000 customers across 193 countries.
The company claims to serve 46 of the top 50 global third-party logistics providers and 23 of the 25 largest global freight forwarders.
The company said regarding itself in a recent ASX announcement:
We are relentless about innovation, adding over 6,300 product enhancements to our global CargoWise platform in the last five years, bringing meaningful continual improvement to the world's supply chains. Our breakthrough software solutions are renowned for their powerful productivity, extensive functionality, comprehensive integration, deep compliance capabilities, and global reach.
The company has faced share price headwinds in the past year, though, including being caught up in the broad-based, AI-driven technology stock sell-off earlier this year.
Issues around founder Richard White's conduct have also dogged the company, with the board replacing him as executive chair in July, although he will continue on as an executive director and Chief Innovation Officer.
Mr White said at the time:
Recent personal media attention is creating an unnecessary distraction from the strength of WiseTech's business. At this time, the senior management team, Zubin and I should be singularly focused on the execution of the Company's growth strategy. As I have stated previously, I strenuously and unequivocally deny the recent allegations in the media. Further, I am conscious that personal attacks on me in the media that are unconnected to the performance of the Company nevertheless have the potential to encourage short selling activity.
Is the Wisetech share price too low?
Macquarie analysts said in a recent note to clients that they think Wisetech can "surprise to the upside" with its guidance for FY27 when it reports its results.
But longer term, Macquarie is more cautious, as they said:
Despite potential new products from WTC, we believe the recent guidance history, limited evidence of new product monetisation, plus execution risk serving new BCO customers undermine growth durability. Medium term, we remove Container Transport Optimisation (CTO) (ex Australia) from forecasts. Our channel checks reflected no evidence supporting a US CTO rollout in the near-medium term. Moreover, with tariffs and regulatory issues demanding attention for US port authorities and landside operators, these challenges will likely persist.
Macquarie has sharply reduced its price target for Wisetech shares, down from $97.70 to $47.10, but still comfortably above the current share price.
Wisetech is valued at $13.4 billion.
