While there have been trouble hotspots, like Apple’s crisis with its factory workers, White said WiseTech’s customers have all seen strong growth.
“We are seeing quite substantial growth as we forecast. And that growth is within the range we’re forecasting. So from our perspective it wasn’t a pullback at all, it looks pretty close to our estimates,” he said.
China’s resilience, which will be tested if Beijing lifts its COVID-zero policy, has helped WiseTech weather the current tech-sector downturn, with the group forecasting strong revenue growth (up to 23 percent) at its recent annual general meeting ) confirmed earnings growth of up to 30 percent.
“So from our perspective it wasn’t a pullback at all, it looks pretty close to our estimates.”
Richard White, CEO of WiseTech Global
WiseTech’s shares have more than doubled from pre-COVID levels in early 2020, meaning the company continues to trade at multiples that its ASX-listed tech rivals like Afterpay and Altium used to take for granted.
White said the difference is that WiseTech investors don’t have to make the same trade-offs as other stocks. “I think people tend to choose between growth and profit. And WiseTech learned early on to be highly efficient and to grow.”
But the stock has had its fair share of critics in the investment community. Some have balked at the valuation despite liking the company’s fundamentals.
In November, Citi analyst Siraj Ahmed gave the stock a “sell” rating, although he pointed to WiseTech’s strong hiring activity as a good indicator of growth ahead.
“With shares trading at 24x sales in FY23e, we are rated sell on valuation grounds,” he said.
UBS is a fan, however, as analyst Lucy Huang maintained a “buy” rating after the company’s shareholders’ meeting, saying the valuation is consistent with other high-growth software-as-a-service competitors.
“We remain confident in our mid-term growth prospects for WiseTech and reaffirm the purchase,” she said.
White doesn’t lose too much sleep over how market watchers rate WiseTech, and describes his formula for keeping the market happy and the stock humming as simple.
“Ultimately, you will be valued by the market based on what you tell the market you will do. And then deliver that,” he said.
“You keep going like this and people are starting to trust you a lot. And they don’t worry about the volatility of the market and the ups and downs of the market. We are working very hard to deliver this guidance.”
https://www.smh.com.au/business/companies/wisetech-s-secret-weapon-helps-it-defy-tech-downturn-20221206-p5c46i.html?ref=rss&utm_medium=rss&utm_source=rss_business WiseTech’s secret weapon is helping to weather the tech downturn