Morningstar

Morningstar, Inc.

Equity Bottom-Up

As foreshadowed in our note of March 19, 2019, we recommend shareholders in narrow-moat-rated WiseTech Global do not subscribe for new shares under the share purchase plan, or SPP. WiseTech's current market price of AUD 22.61 is significantly above our fair value estimate of AUD 7.40 per share, implying the shares are significantly overvalued. The SPP is open to shareholders who owned WiseTech Global shares as at 7:00pm on March 18, 2019. The market price and our earnings forecasts imply a…

We have incorporated narrow-moat-rated WiseTech Global’s AUD 92 million acquisition of Containerchain into our financial model. Although our short-term earnings forecasts are unchanged, we have increased our long-term forecasts and our fair value estimate by 3% to AUD 6.80 per share. However, at the current market price of AUD 18.22, we continue to believe the stock is significantly overvalued. The current market price implies a fiscal 2020 price/earnings ratio of 108 versus 38 at our fair…

Narrow-moat-rated WiseTech Global’s first-half result was very strong but weaker than we expected, and management’s earnings guidance implies weaker growth in the second half. Considering it’s already late February, we expect guidance will be reasonably accurate and we’ve cut our full-year earnings forecast accordingly. For example, we’ve cut our revenue forecast by 2% to AUD 350 million, although still slightly ahead of guidance of AUD 332 to 335 million, and our EBITDA forecast has fallen 14%…

We have increased our fair value estimate for narrow-moat Wisetech Global to AUD 6.60 per share following two further acquisitions and an increase in earnings guidance. At the current market price of AUD 15.59, we still believe the shares are significantly overvalued despite the 37% share price fall since August. The price/earnings ratio is 68 based on the market price, or 27 if based on our fair value estimate. However, Wisetech capitalises a large proportion of research and development costs…

We were extremely surprised by the market’s reaction to narrow-moat-rated WiseTech Global’s fiscal 2018 financial results, with the 28% increase in its share price implying that the company had significantly exceeded consensus estimates or made a particularly material announcement. Although management provided new earnings guidance for fiscal 2019, the EBITDA guidance of AUD 100 million to AUD 125 million was similar to consensus and our estimates. The market may have been impressed by the…

Australia

WiseTech Global Pty Ltd provides various technology and information technology management solutions. The Company offers cloud based various technology platforms, market specific software and logistics technology solutions, such as edienterprise, a platform supply chain logistics management system, software-as-a-service, and clinical management software. 