WiseTech Global Ltd (ASX: WTC) shares have fallen a long way from their previous highs.
The logistics software company is trading around $31.77 on Tuesday, leaving the WiseTech share price well below where it has traded in recent years.
Could it recover to $50 in 2027?
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The earnings outlook is interesting
At first glance, a move from $31.77 to $50 looks ambitious. It would require the WiseTech share price to rise around 57%.
But I think the earnings outlook could be supportive of a major re-rating that underpins a large rise.
Consensus forecasts point to earnings per share of $1.42 in FY27, followed by $1.88 in FY28 and $2.28 in FY29.
At today's price, WiseTech is trading on a PE ratio of around 22 times forecast FY27 earnings. That falls to roughly 17 times FY28 earnings and only 14 times FY29 earnings.
For a global technology business expected to grow earnings at that sort of rate, those multiples look quite low to me.
In fact, I think the current valuation suggests the market is not fully convinced WiseTech will deliver those forecasts.
That is understandable. Forecasts can change, and investors have good reason to wait for evidence that the expected earnings growth is actually coming through.
But it also creates an opportunity if WiseTech does deliver.
What would $50 look like?
At $50, the WiseTech share price would trade at around 35 times forecast FY27 earnings.
That would be a much higher valuation than today, but the picture changes as we look further ahead.
Based on the current forecasts, a $50 share price would represent around 27 times FY28 earnings and 22 times FY29 earnings.
I do not think those valuations would look unreasonable if WiseTech were clearly on track to produce the expected growth.
That is why I can see a path to $50.
There is still plenty of uncertainty
WiseTech still has to deliver the earnings growth analysts are expecting. If profits fall short, the valuation at $50 would quickly become much harder to justify.
That is probably one reason the shares are trading where they are today.
For me, the opportunity comes from the gap between what the market appears willing to pay for WiseTech now and what the business could be worth if earnings grow as expected.
However, I would not assume that gap closes quickly, and there could be plenty of volatility along the way.
Foolish takeaway
I think $50 is within reach for the WiseTech share price in 2027.
The shares have a long way to go from $31.77, but the earnings forecasts give me a reason to believe a strong recovery is possible.
There is still uncertainty around whether WiseTech can deliver those numbers. But if the business starts showing that the expected earnings growth is on track, I think today's share price could end up looking very cheap.
