Down 55%, why WiseTech shares could be a bargain hiding in plain sight

The market has pushed parts of the ASX higher over the past year, but not every growth share has joined in.

Some former market favourites have been sold down heavily as investors reassess valuations, growth expectations, and the potential impact of artificial intelligence (AI).

I think that has created a buying opportunity for WiseTech Global Ltd (ASX: WTC) shares.

A sticky software platform

WiseTech Global has been one of the ASX’s great technology success stories.

The company is best known for CargoWise, its software platform used by logistics companies to manage complex global freight operations.

That might not sound as exciting as consumer technology, but it is very important. Global logistics is messy, document-heavy, highly regulated, and operationally complex. Freight forwarders, customs brokers, carriers, and warehouse operators need systems that can handle that complexity across multiple countries.

WiseTech sits right in the middle of that.

For me, the most important point is that CargoWise is not a lightweight tool that customers can easily swap out. Once a logistics business has built workflows, staff training, customer processes, and compliance systems around it, changing providers can be disruptive.

That creates stickiness, and I think sticky software businesses can be very valuable over the long term.

Why the sell-off interests me

WiseTech shares have fallen 55% over the last year, and I can understand why some investors have stepped back.

The market has become less forgiving toward growth stocks. There have also been concerns about acquisitions, leadership changes, valuation, and the potential for AI to disrupt traditional software models.

Those are real questions.

But I do not think they automatically destroy the long-term investment case.

In my view, WiseTech still has several qualities I want in an ASX growth share. It operates in a huge global market, has a specialist product, generates recurring revenue, and serves customers that rely on its software to run important parts of their operations.

That is a strong base to build from.

AI could help rather than hurt

The AI question is probably one of the biggest issues investors are thinking about.

Could AI reduce the need for logistics software? I am not convinced.

I think it is more likely that AI becomes another layer inside platforms like CargoWise. Logistics involves routing, compliance, documentation, exception management, customs rules, pricing, and workflow automation. These are areas where smarter tools could make the platform more useful.

WiseTech already has the industry knowledge, customer base, data, and workflow position. I think that gives it a reasonable chance of using AI to strengthen its product rather than being pushed aside by it.

Of course, execution matters. Management still needs to prove that investment in AI and product development translates into better outcomes for customers and stronger earnings over time.

The valuation looks interesting

WiseTech is unlikely to look cheap on traditional valuation metrics. High-quality software shares rarely do.

But after such a large fall, I think the share price now gives investors a better chance of attractive long-term returns than it did when sentiment was much stronger.

The key is patience.

WiseTech is not a share I would buy for a quick bounce. I would buy it because I think the business could be materially larger in five to 10 years if it keeps deepening its position in global logistics software.

Foolish Takeaway

WiseTech is still facing uncertainty, and I would not pretend the risks have disappeared.

But I think the market may be giving investors a chance to buy a high-quality ASX tech share at a far more reasonable price than before.

The post Down 55%, why WiseTech shares could be a bargain hiding in plain sight appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.