WiseTech Global Limited (ASX: WTC) released the slides for its investor conference this morning, sending the share price past $26 for the first time. Here’s what you need to know.
About WiseTech
WiseTech Global was founded in 1994 by Richard White to provide software for the logistics sector. Since then it has grown to become a global provider of logistics software, claiming to service 19 of the top 20 logistics companies globally.
WiseTech makes money by charging its customers on a ‘per use’ basis rather than as a standard subscription model. Meaning, WiseTech directly benefits as its customers grow their businesses.
Investor Conference Materials
WiseTech’s release this morning highlighted some of the claims they had made at a previous investor’s conference, like the fact that 38 of the top 50 global third-party logistics providers now use WiseTech products. In total, their products are used by more than 12,000 logistics companies.
Even more impressive, every one of the top 25 global freight forwarders is now using WiseTech products.
While the figures are impressive, the material shows very little new information and only highlights figures previously released in their half-year report or at the Macquarie Investors Conference.
One Big Risk for WiseTech
The one new aspect of the release is WiseTech’s commentary on regulatory and trade changes, which they describe as a tailwind. I’m not so convinced.
While their “globally integrated customs and border-compliance platform” may be designed to make processes more efficient for freight forwarders and logistics companies, that doesn’t change the fact that a trade war could lead to a reduction in international trade, which would likely hurt freight forwarders and logistics companies.
WiseTech appears to argue that this is a tailwind because their product can help logistics companies navigate trade changes, but that doesn’t mitigate the risk of a slowdown in international trade.
While WiseTech is certainly making leaps and bounds when it comes to customer acquisitions and product development, I don’t think that the risks they face necessarily justify the divergence of the share price from consensus analyst targets.
The WiseTech share price may continue to grow, but it looks like a risky investment to me at current prices.
I’d rather invest in one of the growth companies mentioned in the free report below.
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Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.
