Let’s take a closer look.
The post The WiseTech (ASX:WTC) share price is up over 40% in a month! appeared first on The Motley Fool Australia. –
The share price of ASX tech company WiseTech Global Ltd (ASX: WTC) has been skyrocketing recently. Shares in the logistics software developer have risen close to 47% in the last month alone – and are now up almost 80% so far this year!
Let’s take a look at some of the factors that may be driving these big gains in the WiseTech share price.
WiseTech’s flagship product is a centralised global trade and logistics platform called CargoWise. The platform aims to give WiseTech’s corporate customers the ability to manage their entire supply chain in one single application. For example, CargoWise can help its users stay on top of their inventory levels, track cargo internationally, and even ensure that they pay the correct import taxes, duties and tariffs.
WiseTech is no stranger to media attention. It forms part of the much-vaunted WAAAX group of ASX technology growth shares – along with fellow market darlings Altium Limited (ASX: ALU), Afterpay Ltd (ASX: APT), Appen Ltd (ASX:APX) and Xero Limited (ASX: XRO). However, the WiseTech share price has been the standout performer amongst the group so far this year and is the only one to have posted double-digit growth.
WiseTech released its FY21 results to the market on 25 August. It reported strong results across the board, with total revenues coming in at $507.5 million – an uplift of 18% year-on-year. This landed at the top end of WiseTech’s previously issued guidance of between $470 million and $510 million.
Earnings before interest, tax, depreciation and amortisation expenses (EBITDA) came in at $206.7 million for the year. This was a year-on-year increase of over 60%, and easily exceeded WiseTech’s guidance range of between $165 million and $190 million. The unexpectedly high uplift was driven by company-wide cost saving initiatives that WiseTech claimed had helped to deliver $22 million in gross cost reductions during the year.
Commenting on the result, WiseTech founder and CEO Richard White stated that “our top line revenue growth, coupled with our ability to implement organisation-wide efficiencies and extract acquisition synergies, has enabled us to achieve a marked step change in operating leverage that is evident in our strong FY21 financial performance.”
WiseTech is just as bullish about its prospects for FY22. The company forecasts annual revenue growth of between 18% and 25% (to between $600 million and $635 million) and EBITDA growth of between 26% and 38% (to between $260 million and $285 million). However, WiseTech does also note that the resurgence of COVID-19 variants in certain jurisdictions could pose a risk to those forecasts.
Recent moves in the WiseTech share price
The market reacted positively to WiseTech’s FY21 results announcement. On the day WiseTech released its results, its share price jumped over 28% higher. While the WiseTech share price hasn’t experienced any other single-day movements of that magnitude since, it has still trended higher overall in September, and is currently trading at $53.92 (as at the time of writing).
Should you invest $1,000 in WiseTech right now?
Before you consider WiseTech, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and WiseTech wasn’t one of them.
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*Returns as of August 16th 2021
Motley Fool contributor Rhys Brock owns shares of AFTERPAY T FPO, Altium, Appen Ltd, and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Altium, Appen Ltd, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Altium, Appen Ltd, WiseTech Global, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.