WiseTech Global Ltd (ASX: WTC) shares are back under pressure, falling 5% to $37.65 on Wednesday and wiping out a large chunk of August's gains.
For much of August, it looked like WiseTech shares couldn't be stopped. During the first three weeks, the technology stock surged 25%, reaching $45.47 on 25 August.
Then came the FY26 result and the rally quickly lost momentum. Since that result, WiseTech shares have fallen around 17%, leaving them a long way from the $100 level reached a year ago.
The ASX tech stock is now down 45% year to date and 62% over the past 12 months. So, has the rally run out of road?
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WiseTech's numbers weren't disastrous
WiseTech reported a 46% increase in EBITDA to US$558.4 million for the year to 30 June. That landed within management's US$550 million to US$585 million guidance range, although it fell slightly short of the US$569.5 million market forecast.
For FY27, management of WiseTech shares expects total revenue growth of 6% to 10%, reaching US$1.48 billion to US$1.54 billion. Underlying EBITDA is forecast to grow 12% to 21%, with margins improving to 49% to 51%.
Global leader with big issues
That outlook is important because the collapse in WiseTech shares hasn't simply been about deteriorating demand.
WiseTech's CargoWise platform remains a major logistics software system used by the world's top 25 freight forwarders, including Toll and DHL. It helps freight forwarders, customs brokers and supply-chain operators manage increasingly complex global trade.
That gives WiseTech exposure to powerful long-term trends, particularly the digitalisation of global trade and growing demand for sophisticated logistics technology.
The bigger issues for WiseTech shares have been investor confidence, governance concerns and regulatory matters.
What do brokers think about WiseTech shares?
Several brokers remain firmly bullish. Morgans retained its buy rating with a trimmed $62.50 price target, while Morgan Stanley maintained its buy rating and $70 target. The latter implies potential upside of around 86% from Wednesday's share price.
Bell Potter also remains bullish, despite cutting its target from $71.75 to $65. Citi lifted its target from $55.05 to $58.75, while UBS reduced its target from $65 to $56 but retained its buy recommendation.
But there is plenty of scepticism. Jefferies downgraded WiseTech shares to hold with a $45 target, while JP Morgan also has a hold rating, with a $40 target.
At $37.65, the huge gap between those valuations tells investors something important: the market remains deeply divided over WiseTech's recovery.
Foolish takeaway
Is the WiseTech rally over? It's too early to say, but Wednesday's decline shows just how fragile the recovery remains.
The underlying business continues to generate strong earnings growth, and management is forecasting further EBITDA growth in FY27. But investors are clearly demanding more than good financial numbers.
WiseTech needs to rebuild confidence around its strategy, governance and long-term growth prospects. Until that happens, the shares could remain volatile.
For investors willing to look beyond the recent weakness, the bullish broker targets suggest significant upside if WiseTech can deliver. But the wide valuation gap also highlights the risk: the market is far from convinced that the company's comeback is complete.
