WiseTech Global shares have landed firmly in the green over recent days
The post The WiseTech Global (ASX:WTC) share price is up 5% in the last week appeared first on The Motley Fool Australia. –
The WiseTech Global Ltd (ASX: WTC) share price has shown strength on the chart over the past week.
Whereas the S&P/ASX 200 index (ASX: XJO) has climbed by 0.6% since last Friday, Wisetech shares are more than 5% in the green.
What tailwinds are behind WiseTech?
The WiseTech Global share price has been on the move ever since the cloud-based software company reported its FY21 earnings last week.
In it, the company recognised an 18% increase in revenue to $507 million. It also grew earnings before interest, taxes, depreciation, and amortisation (EBITDA) by 63% year-on-year (YoY), smashing EBITDA guidance by a country mile.
One important takeout was that more than 95% of WiseTech’s sales of $101 million was from recurring revenue.
Much of this strength was underlined by increased adoption of its software, resulting in a greater market penetration, according to WiseTech.
As a result, the company doubled net profit after tax (NPAT) to $105 million, and left the year with free cash flow of around $140 million, a 150% YoY increase.
The growth in NPAT and free cash flow allows WiseTech to increase its dividend by 140% to 3.85 cents per share. Consequently, WiseTech shareholders will enjoy a 6.55 cents per share total dividend in FY21.
One other factor that could weigh in on the WiseTech Global share price is the fact management upgraded guidance for its FY22 expectations. Management is now calling for an 18%–25% revenue growth in FY22 to $600 million–$635 million.
This should lead to EBITDA of $260 million to $285 million according to WiseTech’s modelling, which calls for a growth of 26%–38% over the year.
Investors appear to have heavily favoured WiseTech’s results. For instance, they rewarded the company by pushing the WiseTech Global share price from $36.20 to $46.50 on the day of the earnings release, an almost 30% gain on the day.
Since then, WiseTech shares have continued their ascent northwards. However, they are trading 0.35% down on Friday at the time of writing.
WiseTech Global share price snap shot
The WiseTech Global share price has been a major performer this year, posting a return of 58% since January 1. WiseTech shares are also around 64% in the green over the past 12 months.
Both of these results have outpaced the broad index’s gain of around 25% over the past 12 months.
Should you invest $1,000 in WiseTech Global right now?
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The author Zach Bristow has no positions 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.