WiseTech (WTC) has plunged by 45% from its November high, outpacing falls in other high-performing momentum trades that have been unwound over the last six weeks. Most subscribers would be familiar with the reasons behind the weakness, as the press has dubbed it “another billionaire behaving badly.” Whether and when we should consider WTC has become a balancing act, as we attempt to determine the appropriate new valuation for this cloud-based logistics software business. WTC dominates its market, and although sticky clients insulate the company’s current earnings, it doesn’t necessarily position it to win new customers, which is very important for growth.
- WTC’s valuation is now back to 2022 lows when the market moved heavily against technology stocks, trading on an Enterprise Value/EBITDA multiple of 35x.
WTC topped out last November after delivering a rare guidance downgrade largely driven by the delayed rollout of Container Transport Optimisation (Landside) from late 2Q25 into the 2H25. This was not a major issue, but it illustrated how the stock was priced for perfection – it dropped 22% in a week. Compounding this has been the ongoing personal issues of Richard White, the founder and driving force, which has proven to be far more significant and has no doubt hurt WTC’s reputation. Recently, Australian Super, Australia’s largest pension fund, sold its entire $580 million stake over corporate governance concerns.
- It will take time for major institutions to regain confidence in WTC as an investable asset; they may not sell further, but buying will require a whole new level of comfort.
As the saying goes, “When it rains, it pours,” and WTC has felt it all of late. Four directors resigned and the company downgraded earnings by ~10% in February, however surprisingly, White is now back in the Executive Chairman role which implies he is fully committed to the company and his 36% shareholding in the business. While the optics of this don’t look great, we do think this is a positive move from a business perspective, ultimately improving the outlook for WTC.
- Overall, we are comfortable with the medium-term outlook for WTC with earnings underpinned by increasing digitisation and higher tech spending across the logistics industry. Corporate governance will remain an issue for some time, though this will improve from current levels as the board continues to expand.
Our “best guess” is Richard White will fire up and take WTC to bigger and better things, but this is no more than a “Gut Feel”.
- We like WTC in the medium term, and the risk/reward is appealing around current levels, though we suspect headlines will remain very mixed for a while yet. It may be more prudent to buy the stock at a higher price than take on the current uncertainty. Food for thought!
MM is cautiously bullish WTC medium-term
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