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Analysts Have Made A Financial Statement On WiseTech Global Limited's (ASX:WTC) Half-Yearly Report

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·4 min read
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It's been a sad week for WiseTech Global Limited (ASX:WTC), who've watched their investment drop 12% to AU$27.79 in the week since the company reported its half-yearly result. WiseTech Global reported in line with analyst predictions, delivering revenues of AU$239m and statutory earnings per share of AU$0.50, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on WiseTech Global after the latest results.

Check out our latest analysis for WiseTech Global

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earnings-and-revenue-growth

Taking into account the latest results, the current consensus from WiseTech Global's nine analysts is for revenues of AU$499.4m in 2021, which would reflect a decent 8.1% increase on its sales over the past 12 months. Statutory earnings per share are expected to dive 39% to AU$0.27 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$501.6m and earnings per share (EPS) of AU$0.27 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of AU$27.04, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic WiseTech Global analyst has a price target of AU$35.45 per share, while the most pessimistic values it at AU$8.30. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the WiseTech Global's past performance and to peers in the same industry. We would highlight that WiseTech Global's revenue growth is expected to slow, with forecast 8.1% increase next year well below the historical 33%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. Factoring in the forecast slowdown in growth, it seems obvious that WiseTech Global is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for WiseTech Global going out to 2025, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for WiseTech Global that we have uncovered.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.