It has been one of the most dramatic destructions of shareholder value in recent ASX history.

WiseTech Global Ltd (ASX: WTC) shares have fallen approximately 70% over the past twelve months. The company has shed tens of billions of dollars in market capitalisation. This has landed the logistics software company among the worst-performing stocks in the entire ASX 200.

Yet something has shifted in the past week.

There are small but noticeable signs that at least some investors are beginning to reassess.

The question remains whether that reassessment is warranted.

What actually drove the 70% fall

The sell-off in WiseTech shares has been primarily driven by governance concerns rather than by any fundamental deterioration in the CargoWise business itself.

Founder and Executive Chair Richard White has faced a series of allegations over the past twelve months, including separate ASIC and AFP investigations and most recently reports of an AFP inquiry into alleged trafficking matters, which White has emphatically denied.

Each successive wave of negative coverage has eroded institutional confidence in a way that the underlying business numbers alone have not justified.

WiseTech has maintained its FY26 guidance, expecting revenue of US$1.39 billion to US$1.44 billion and EBITDA of US$550 million to US$585 million at a healthy 40% to 41% margin.

However, the market has stopped paying a premium multiple for that growth while the governance cloud remains.

The case for a rebound for WiseTech shares

The bull case starts with the business itself, which has not broken.

CargoWise is used by 23 of the world’s top 25 global freight forwarders. Switching costs are high and as a result customer retention has remained robust even through the governance turmoil.

The platform serves more than 22,000 logistics companies across 193 countries and is deeply embedded in mission-critical workflows that cannot be easily or cheaply replaced.

Furthermore, CEO Zubin Appoo recently purchased approximately $1 million of WiseTech shares on-market. This is a signal of insider confidence that management believes the shares are trading below intrinsic value.

On valuation, WiseTech shares trade on approximately 28 times FY27 earnings and closer to 15 times FY28 earnings.

At 15 times FY28 earnings, a business with WiseTech’s market position and expected earnings growth rate looks quite attractive. The broker community agrees.

Twelve of the fifteen analysts covering WiseTech rate the stock as a buy or strong buy, with none recommending a sell.

Bell Potter retains a buy rating with a price target of $71.75, implying significant upside from today’s price.

The case against WiseTech shares

Governance concerns are not resolved simply because the share price has fallen far enough.

Stuart Bromley from Medallion Financial Group retains a hold rating. The broker notes that while WiseTech remains one of Australia’s highest-quality technology businesses, near-term sentiment may remain volatile amid management executing its long-term strategy.

For the share price to sustain a recovery rather than simply bounce from deeply oversold levels, the market will need greater clarity on three things: the resolution of the Richard White legal matters, confirmation that the CargoWise Value Pack transition with large customers is progressing, and a FY26 full-year result in August that confirms the guidance the company has maintained throughout the year.

None of those three catalysts has yet landed.

Until they do, investors will continue to face a great deal of uncertainty.

Foolish takeaway

WiseTech shares are down 70% for reasons that are substantially governance-driven rather than business-driven.

The CargoWise platform is intact, guidance has been maintained, the CEO is buying shares, and twelve of fifteen brokers see significant upside.

Whether WiseTech shares are ripe for a rebound depends on whether the governance cloud lifts in FY27.

If it does, the business case for a material recovery is well-established.

If it does not, patience will be required for longer than most investors would like.

The post Are WiseTech shares ripe for a rebound? appeared first on The Motley Fool Australia.

More reading

• How to tell if an ASX share is cheap or a value trap
• Here are the top 10 ASX 200 shares today
• Down 35%+, should you buy Zip and WiseTech shares?
• Can WiseTech shares double from here? Analysts are betting yes
• These ASX tech stocks have lost billions. Buy the dip or stay away?

Motley Fool contributor Mark Verhoeven 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.

A falling share price can look tempting. Some of the best long-term investments are made when quality companies are temporarily out of favour.

But not every beaten-down ASX share is a bargain. Sometimes a stock is cheap because the business is getting worse, earnings are under pressure, or the market has finally stopped believing an over-optimistic story.

So how can investors tell the difference?

Start with the reason for the fall

The first step is to understand why the share price has dropped.

A high-quality company can fall because of short-term market fear, weaker sentiment, broker downgrades, or concerns that may prove less damaging than investors first thought.

ResMed Inc (ASX: RMD) is a good example of a company that has been sold down at times because of worries about competition, margins, and weight-loss drugs. This is despite it continuing to record strong earnings growth year after year.

That is very different from a company falling because of repeated earnings downgrades, weak cash flow, rising debt, governance problems, or a business model that is not delivering.

A share price fall is not enough information by itself. The reason behind the fall is what needs the most attention.

Check whether earnings can recover

A cheap-looking ASX share needs a believable path back to better profits.

Investors can ask whether revenue is still growing, whether margins can improve, whether costs are under control, and whether management has a realistic plan.

CSL Ltd (ASX: CSL) shows why this is so important. After a sharp share price fall, the key issue is not simply whether the healthcare giant looks cheaper than it used to. Investors need to assess whether its plasma, vaccines, and Vifor businesses can rebuild momentum after a difficult period.

A value trap is more dangerous because earnings keep sliding while the share price keeps looking cheaper on old numbers.

That is why relying only on a low price-to-earnings ratio can be risky. A stock trading on 10 times earnings is not cheap if those earnings are about to fall sharply.

Look at the balance sheet

Debt can turn a difficult period into a serious problem.

A company with a strong balance sheet has more options. It can keep investing, absorb weaker conditions, avoid emergency capital raisings, and wait for the cycle to improve.

A heavily indebted company has less room to make mistakes.

Higher interest costs can eat into profits, lenders may become more demanding, and shareholders can be diluted if the company needs fresh equity at a weak share price.

That is particularly important with smaller speculative shares. Brainchip Holdings Ltd (ASX: BRN), for example, has regularly attracted attention because of its technology story, but investors also need to consider revenue, cash burn, and dilution when judging whether a lower share price is really a bargain. In Brainchip’s case, investors buying the dip have consistently experienced further weakness.

Separate sentiment from substance

Markets can become too negative. A company may still have valuable assets, loyal customers, strong brands, useful technology, or a leading market position even when the share price is under pressure.

That is often where long-term investors can find opportunity. 

WiseTech Global Ltd (ASX: WTC) is an interesting case because the business still has high-quality logistics software, but governance concerns and leadership uncertainty have weighed heavily on confidence. That shows how a damaged share price can sometimes reflect issues outside the core product.

The key is separating a damaged share price from a damaged business.

If the market is worried but the company’s competitive position remains strong, the selloff may eventually prove excessive.

If customers are leaving, margins are shrinking, debt is rising, and management keeps missing guidance, the lower share price may be telling the truth.

Be patient

Investors do not need to decide immediately. A watchlist can be useful because it allows time to follow company updates, compare management promises with results, and see whether the investment case is improving.

Some fallen ASX shares will recover strongly. Others will keep disappointing.

The best bargains usually come from quality businesses facing temporary pressure, not weak businesses wearing a cheaper price tag.

The post How to tell if an ASX share is cheap or a value trap appeared first on The Motley Fool Australia.

More reading

• Are WiseTech shares ripe for a rebound?
• 2 ASX healthcare shares crashing, now bouncing: buy, hold or sell?
• Buy, hold, sell: Dexus, Resmed, BHP shares
• Here are the top 10 ASX 200 shares today
• Down 35%+, should you buy Zip and WiseTech shares?

Motley Fool contributor James Mickleboro has positions in CSL, ResMed, and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, ResMed, and WiseTech Global. The Motley Fool Australia has positions in and has recommended ResMed and WiseTech Global. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

We’re now a week into the 2027 financial year, though it’s much the same as FY26 so far. Investors may be asking themselves: where should I invest my money in FY27?

The attractiveness of some investments may have changed in the last few months following the Federal budget. Property investors who buy an established residential property can no longer benefit from negative gearing (the losses are carried forward until the property makes a profit), though buyers of new builds can still make use of negative gearing.

The outlook for sizeable capital gains for residential property looks challenging in the short to medium term.

In my view, there are three areas that still make a lot of sense for investors.

Commercial property

Residential properties may have been impacted, but commercial property looks as attractive as ever to me. Commercial properties are normally positively geared, which is great for investor cash flow.

However, I’m not looking to become a property manager. Instead, I believe that high-quality real estate investment trusts (REITs) are a great option to invest my money because I can buy a stake in a portfolio of properties in a single transaction.

Names like Centuria Industrial REIT (ASX: CIP), Dexus Industria REIT (ASX: DXI), Charter Hall Long WALE REIT (ASX: CLW) and Rural Funds Group (ASX: RFF) offer exposure to quality property portfolios and good distribution yields. As a bonus, they are all trading at large discounts to their last reported net tangible assets (NTA).

High-quality exchange-traded funds

Another area that I think is well worth investing in is exchange-traded funds (ETFs) and listed investment companies (LICs) because of the diversification and returns they can provide over the long-term.

I’d rather invest in international shares than local shares because I’m not sure that ASX blue-chip shares are going to grow earnings materially in the near-term. Major ASX bank shares face headwinds from the property taxation changes, as well as a challenge from Macquarie Group Ltd (ASX: MQG), while African iron ore from new projects could be a headwind for earnings from BHP Group Ltd (ASX: BHP) and Fortescue Ltd (ASX: FMG).

In my view, something like the Vanguard MSCI Index International Shares ETF (ASX: VGS) makes a lot of sense because it provides exposure to well over 1,000 shares from the global share market.

But, given the uncertainty of how various intriguing investment trends will play out – AI, data centres, private credit, the lack of fuel and other resources flowing out of the Middle East, and inflation – I think high-quality businesses are best-suited to these conditions.

Over the long-term, I believe ideas such as VanEck MSCI International Quality ETF (ASX: QUAL) and Betashares Global Quality Leaders ETF (ASX: QLTY) can outperform the wider global share market, so that could be a great place to invest my money.

ASX shares that can grow earnings

The final place that could be a good area to invest is good ASX shares with solid earnings growth potential.

There are plenty of businesses that could deliver pleasing returns over the long-term as they grow their earnings. The ASX is more than just the largest businesses.

I’m thinking of names like Temple & Webster Group Ltd (ASX: TPW), Breville Group Ltd (ASX: BRG), Sigma Healthcare Ltd (ASX: SIG), TechnologyOne Ltd (ASX: TNE), Siteminder Ltd (ASX: SDR), L1 Group Ltd (ASX: L1G), Lovisa Holdings Ltd (ASX: LOV), Wesfarmers Ltd (ASX: WES) and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

These aren’t the only names I’d buy to invest my money for my portfolio, there are plenty of exciting options!

The post How should I invest my money in FY27? appeared first on The Motley Fool Australia.

More reading

• How much is needed in superannuation to target a $70,000 annual passive income?
• 5 of the best investments on the ASX right now to complement your superannuation
• Buy, hold, sell: Dexus, Resmed, BHP shares
• 2 world-class ASX 200 shares I want in my portfolio
• Up 57%! 3 compelling reasons to still buy BHP shares today

Motley Fool contributor Tristan Harrison has positions in Breville Group, Rural Funds Group, SiteMinder, Technology One, Temple & Webster Group, VanEck Msci International Quality ETF, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Macquarie Group, SiteMinder, Technology One, Temple & Webster Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Rural Funds Group, SiteMinder, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended BHP Group, Lovisa, Macquarie Group, Technology One, Temple & Webster Group, Vanguard Msci Index International Shares ETF, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.