Broker gives its verdict on the WiseTech Global (ASX:WTC) share price

Is it too late to buy this market darling's shares?

| More on:
A man is connected via his laptop or smart phone using cloud tech, indicating share price movement for ASX tech shares and asx tech shares

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The WiseTech Global Ltd (ASX: WTC) share price has been one of the best performers on the S&P/ASX 200 Index (ASX: XJO) in 2021.

Since the start of the year, the logistics solutions company's shares have risen an incredible 66%.

Why is the WiseTech Global share price rocketing higher?

Investors have been bidding the WiseTech Global share price higher this year following a very impressive performance in FY 2021.

For the 12 months ended 30 June, the company reported an 18% increase in revenue to $507.5 million and a 63% jump in EBITDA to $206.7 million. The latter was well ahead of its EBITDA guidance of $165 million to $190 million.

Also giving the company's shares a lift was its guidance for the year ahead. Management advised that it is expecting further strong growth in FY 2022 and has provided guidance for EBITDA growth of 26% to 38%.

Is too late to invest?

Unfortunately, one leading broker doesn't see enough value in the WiseTech Global share price at present to recommend it as a buy.

According to a recent note out of Bell Potter, its analysts have put a hold rating and $47.50 price target on the company's shares.

Based on the current WiseTech Global share price of $50.58, this implies potential downside of 6% over the next 12 months.

Bell Potter commented: "We have upgraded our FY22 and FY23 EBITDA forecasts by 23% and 26%. We now forecast FY22 EBITDA of $294.3m which is above the top end of the $260-285m guidance range while our FY22 revenue forecast of $622.8m is within the $600-635m guidance range. Note we forecast the EBITDA margin to increase from 40.7% in FY21 to 47.3% in FY22."

"The net result is a 51% increase in our PT to $47.50 which is a modest premium to the share price [at the time] so we maintain our HOLD recommendation," it added.

In light of this, investors may want to hold out for a better entry point before considering an investment.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended WiseTech Global. The Motley Fool Australia owns shares of and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

Woman in celebratory fist move looking at phone
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Broker Notes

These ASX 200 shares could rise 20% to 50%

Looking for big returns? Brokers think these shares could do the job.

Read more »

A young man sits at his desk working on his laptop with a big smile on his face.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

man thinking about whether to invest in bitcoin
Broker Notes

Why Macquarie expects this ASX 200 dividend stock to keep outperforming

Macquarie has tipped this ASX 200 dividend stock to outperform. Let’s find out why.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Broker Notes

These ASX 200 shares could rise 20% to 35%

These shares are being tipped to deliver market-beating returns by analysts.

Read more »

Keyboard button with the word sell on it.
Broker Notes

8 ASX All Ords stocks downgraded to sell ratings

Find out which shares are out of favour with the experts.

Read more »

Woman smiling whilst shopping in a clothing store.
Dividend Investing

Why this quality ASX 300 dividend stock is tipped to surge 54%

A leading fund manager forecasts significant outperformance from this quality ASX 300 dividend stock.

Read more »

A group of businesspeople clapping.
Broker Notes

Bell Potter names more of the best ASX 200 stocks to buy in June

These stocks could be best buys this month according to the broker.

Read more »