WiseTech Global Ltd shares have fallen a long way from their previous highs.
At first glance, a move from $31.77 to $50 looks ambitious.
At today's price, WiseTech is trading on a PE ratio of around 22 times forecast FY27 earnings.
In fact, the current valuation suggests the market is not convinced WiseTech will deliver those forecasts.
The shares have a long way to go from $31.77, but the earnings forecasts give me a reason to believe a strong recovery is possible.
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WiseTech Global Ltd shares have fallen a long way from their previous highs. The logistics software company is trading around $31.77 on Tuesday.
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The article, shortened and in plain language
WiseTech Global Ltd shares have fallen a long way from their previous highs.
The logistics software company is trading around $31.77 on Tuesday.
At first glance, a move from $31.77 to $50 looks ambitious.
Consensus forecasts point to earnings per share of $1.42 in FY27, followed by $1.88 in FY28 and $2.28 in FY29.
At today's price, WiseTech is trading on a PE ratio of around 22 times forecast FY27 earnings.
For a global technology business expected to grow earnings at that sort of rate, those multiples look low to me.
In fact, the current valuation suggests the market is not convinced WiseTech will deliver those forecasts.
Forecasts can change, and investors have good reason to wait for evidence that the expected earnings growth is coming through.
Based on the current forecasts, a $50 share price would represent around 27 times FY28 earnings and 22 times FY29 earnings.
The shares have a long way to go from $31.77, but the earnings forecasts give me a reason to believe a strong recovery is possible.
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