WiseTech Global Ltd (ASX: WTC) shares are enjoying a welcome lift on Thursday.
The logistics software company's shares are up around 4% to $34.83 at the time of writing following a significant announcement.
Given everything that has happened at WiseTech over the past year, I think this latest development comes at an important time.
But is it enough to make the tech stock a buy?
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A major uncertainty has been resolved
WiseTech announced this morning that the Australian Securities and Investments Commission (ASIC) has concluded two investigations involving the company and its personnel.
The first concerned alleged trading in WiseTech shares involving founder Richard White and two current employees.
ASIC has issued no-action letters confirming it will not pursue enforcement action against those individuals.
It has also concluded a separate governance investigation that began in late 2024, confirming that no enforcement action will be taken against WiseTech.
An investigation involving another individual who is not a company employee remains ongoing.
I think this is a significant development for WiseTech.
Governance concerns have weighed heavily on investor confidence, and the uncertainty surrounding these investigations has made it harder for the market to focus on the company's underlying business.
Having these matters resolved removes an important source of concern. But I certainly wouldn't suggest WiseTech's problems are now behind it.
There is still plenty to prove
WiseTech has undergone substantial changes, and management has some important challenges to navigate.
The acquisition of e2open has expanded its presence across global supply chains, but integrating such a large business brings execution risks.
The company is also changing how it charges customers for CargoWise, moving towards a transaction-based commercial model.
I think this could become a valuable source of growth as customers make greater use of the platform, although investors will want evidence that the transition is delivering the expected benefits.
Artificial intelligence (AI) presents another uncertainty.
WiseTech is investing in AI capabilities to improve productivity and automate logistics processes, but the technology could also change the competitive landscape.
For me, the company's established customer relationships and the complexity of global logistics provide some reassurance.
CargoWise is deeply embedded in customers' operations, and replacing it would be a substantial undertaking.
That gives WiseTech a strong foundation as it works through these changes.
Why I would buy WiseTech shares
Despite the remaining uncertainties, I think the risk-reward proposition looks increasingly favourable.
Consensus forecasts point to earnings per share (EPS) increasing from $1.45 in FY27 to $1.92 in FY28 and $2.32 in FY29.
That would represent growth of approximately 60% over two years.
At $34.83, WiseTech is trading on a PE ratio of around 24 times FY27 earnings, falling to approximately 15 times FY29 earnings.
I think those valuations could prove inexpensive if management delivers on expectations.
Of course, the forecasts are not guaranteed, and investors may remain cautious until WiseTech demonstrates consistent progress. But I see considerable potential for the shares to recover as earnings grow and confidence improves.
Foolish takeaway
I would buy WiseTech shares following today's announcement.
There is still plenty of work ahead, particularly around integration, AI, and the company's changing commercial model.
But with one major source of uncertainty now resolved, I think the outlook is becoming more encouraging.
At around $35, I would be happy to invest and give WiseTech time to rebuild investor confidence.
