The WiseTech Global Ltd (ASX: WTC) share price fell 3% today after the market saw its FY24 outlook update.
WiseTech is a global software business that offers CargoWise, which is used for logistics. It has many of the world’s largest freight and forwarder businesses as customers.
FY24 update
The annual general meeting (AGM) is a chance for a company’s leadership to tell investors about how the previous financial year went, and comments about the future.
WiseTech said it reconfirmed its FY24 guidance. It’s expecting to deliver revenue growth of between 27% to 34%, to a total of between $1.04 billion to $1.095 billion. CargoWise revenue is expected to grow by approximately 34% to 43%.
The ASX tech share is forecasting EBITDA (EBITDA explained) growth of between 18% to 27%, to a range of $455 million to $490 million. Profit performance is important for the WiseTech share price.
WiseTech said the FY24 guidance now includes the foreign exchange tailwind from the recent Australian dollar weakness as well as recent small acquisitions of MatchBox Exchange and Sistemas Casa and their related upfront merger and acquisition costs offsetting continued “macro uncertainty from the global economy and later product release timing.”
The short-term EBITDA margin will be “slightly lower” whilst its larger acquisitions are being integrated. It’s expecting EBITDA margins to return to above 50% in FY26.
WiseTech has launched a multi-year, company-wide efficiency program which the ASX tech share expects to deliver a net $15 million saving in FY24 with an annual run rate of $40 million, “principally by extracting acquisition synergies, streamlining our processes and removing duplication.”
Is the WiseTech share price an opportunity?
WiseTech shares have now fallen 27% from August 2023, so it’s a lot cheaper. But, it still trades on a price/earnings ratio (p/e ratio) of around 100. That still seems expensive in my mind. But, the long-term growth and loyalty of clients is very promising for earnings.
There are other ASX growth shares that I’d rather buy which are trading at much cheaper valuations.
