Dividend Shares

WiseTech Share Price Climbs on New Deal (ASX:WTC)

By Lachlann Tierney, Friday, 06 November 2020

At time of writing, the share price of WiseTech Global Ltd [ASX:WTC] is up 1.54%, trading at $31.57. The WTC share price climbed as a new strategic partnership was announced with OFX Group Ltd. WTC shares have now burst through previous resistance

At time of writing, the share price of WiseTech Global Ltd [ASX:WTC] is up 1.54%, trading at $31.57.

The WTC share price climbed as a new strategic partnership was announced with OFX Group Ltd.

WTC shares have now burst through previous resistance dating back to February:

Source: Tradingview.com

We look at the details of the OFX deal.

WTC deal with OFX

Here is the key passage from the announcement today:

‘By integrating OFX’s digital solution within WiseTech’s CargoWise logistics execution platform, WiseTech’s customers will be able to make fast and low-cost international invoice payments in over 55 currencies. The process for making international payments will be significantly simplified, creating accounts payable efficiencies and a better customer experience.’

And the numbers:

‘The agreement is expected to generate at least $5m in annual Fee & Trading Income by FY24 and deliver material EBITDA growth. It will generate Fee & Trading Income in FY22 and FY23 as we onboard customers. The alliance will be supported by a capital expenditure investment of approximately $1m over the next 12 months funded by cash.’

Outlook for WTC share price

With the acceleration of e-commerce around the world — adding a payments string to the bow is probably a wise move.

This time though, it’s a strategic partnership, not an acquisition after several years of gobbling up smaller companies.

With plenty of upwards momentum, the WTC share price may look to crack the levels marked out below:

Source: Tradingview.com

Another thing to consider is that the company is now trading at an earnings multiple of more than 61.

It’s a heady number, even by tech stock standards.

Regards,

Lachlann Tierney,
For Money Morning

PS: Wishing you’d tipped WTC early? Check out: Four Well-Positioned Small-Cap Stocks — these innovative Aussie companies are well placed to capitalise on post-lockdown megatrends. Click here to learn more.

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

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Lachlann Tierney

Lachlann ‘Lachy’ Tierney is passionate about uncovering hidden opportunities in the microcap sector. With four years of experience as a senior equities analyst at one of Australia’s leading microcap firms, he has built a reputation for rigorous research, deep-dive due diligence, and accessible investor communications. Over this time, he has vetted seed, pre-IPO and ASX-listed companies across sectors, conducted onsite visits, and built strong relationships across the microcap space. Lachy is nearing completion of a PhD in economics at RMIT University, where his research focuses on blockchain governance and voting systems. His work was housed within the Blockchain Innovation Hub at RMIT, a leading research centre for crypto-economics and blockchain research. He holds a Master’s degree from the London School of Economics and an Honours BA in Philosophy and Politics from the University of Melbourne. Born in New York and raised in California, Lachy grew up a few blocks from biotech giant Amgen and counts among his peers various characters in the overlapping worlds of venture capital, technology and crypto. When he’s not researching microcaps, he’s most likely sweating it out in a sauna or dunking himself in cold Tasmanian water.

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The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.