Our SaaS basket has mostly rallied back to pre-Iran war and SaaS-pocalypse levels, except one - Wisetech (WTC). I think this is a quality stock turning into a ‘special situation’ investment. I am not in a hurry to add or trim at all. Let me explain.
My original thesis on Wisetech around Q1 2024 was simply that it was the hardest-to-replicate vertical SaaS business.
But after a year-and-a-half-long struggle around the ex-CEO-founder Richard White’s personal conduct and alleged monopolistic behavior after the e2open acquisition before the competition authority (Australian Competition and Consumer Commission - ACCC), shares have cratered to AUD 39/share from $141/share at peak.
Wisetech’s investment thesis is now a ‘special situation’.
I was wrong to catch the falling knife with my 3 additions on the decline. So, FY2026 results a few days ago provided vital information to set up a more methodological buy/sell plan going forward.
We will evaluate
(i) where the business stands after the corporate governance ordeal,
(ii) the e2open acquisition,
(iii) the pricing model transition, and
(iv) AI prospects.
Before that, let’s review my original thesis to see what’s changed.
Wisetech is a very difficult-to-replicate Software-as-a-service (SaaS) business that solves the most complex logistics problems in a highly regulated industry, resembling the role of Veeva Systems (we own) in the life science industry.
a backbone of the global trading system, with >50% of global trade going through CargoWise, >90% of the top freight forwarders and 3PLs are customers (47 out of top 50)
a platform-based business that can extend organic and inorganic growth for decades, from sea freight to landbase, and from freight forwarding to customs and compliance, and warehousing.
a rockstar CEO founder who has built the business to be profitable from day 1, then grown the company’s revenue, income, and free cash flow by 14x, 25x, and 21x since 2015, respectively. (stats as of FY2024 below)
85%+ gross margin and 40%+ EBIT margin, close to 0% attrition for the past 12 years
valuation at the time was 75x free cash flow at the first buy and 100x FCF at the deep dive.
FY2026 results and how they compare
First, is Wisetech still the backbone of global trade? Mark the month of September 2028.
Read all WTC reviews here. The tracker spreadsheet is reserved for annual members only [Link].
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