The Australian Securities and Investments Commission and the Australian Federal Police executed a search warrant on company premises as part of an investigation into insider trading. Shares plummeted by about 15%.

Why it matters: The investigation includes trades by company founder Richard White, who we consider instrumental to the company’s success, and three other WiseTech (ASX: WTC) employees. The company is unaware of any charges having been laid.

  • The period investigated was after White resigned as CEO in October 2024 and before he assumed the role of executive chairman in February 2025. Some of the sales took place during the blackout period between the end of the financial period and the publication of the results.
  • A company spokeswoman previously said White obtained independent legal advice prior to selling the shares. We think it’s highly likely White’s legal advisors reviewed or discussed the information White had, and concluded White did not have access to material information before selling.

The bottom line: We leave our fair value estimate for the wide-moat company unchanged at AUD 138 per share as we don’t expect the investigation to affect White’s continued employment. Shares now screen as materially undervalued, given the year-long governance saga.

  • We considered cutting our fair value estimate given the risk of a departure. But so far, don’t know the nature and materiality of any information White may have had, and that he sought legal advice before trading seems important.
  • If White is forced out, this would likely materially affect our fair value estimate; we estimate a 15%-20% cut. We think it’s likely that both the rate of growth and the ultimate progression of the business would shrink. But at this stage, we think the risk is small and the shares are cheap regardless.

WiseTech is an AI winner

WiseTech’s long-term strategy centers on becoming the operating system for global trade and logistics as the industry digitizes.

We expect the logistics industry to digitize rapidly over the next decade. The logistics industry currently operates with a relatively low level of digitization. However, the market for logistics services naturally selects for the lowest-cost providers and we see digitization as a key driver of cost-savings. We therefore see the process of digitization as inevitable, either through companies adopting digitization to remain competitive or through digital leaders taking market share from the digital laggards.

WiseTech provides logistics companies the technology to digitize. WiseTech’s core product suite, CargoWise, provides the best-in-class software solution for international freight-forwarding by air and ocean, and customs and compliance. We see logistics companies that use the CargoWise international freight-forwarding solution significantly outperforming their peers due to the efficiency and productivity improvements the platform provides. We therefore expect this solution to become the industry default, either through increased customer adoption or through WiseTech’s customers taking market share.

We expect WiseTech to leverage its already dominant position in international freight-forwarding to move into downstream adjacencies, which consist of, in order of functional proximity, road and rail and warehousing. Additionally, with the acquisition of e2open, we also expect WiseTech to move into upstream adjacencies, as it starts servicing beneficial cargo owners with their logistics procurement processes.

Bulls say

  • CargoWise’s international freight-forwarding solution is best-in-class and we expect this solution to become the industry-default.
  • WiseTech is well placed to leverage CargoWise’s market position in international freight-forwarding into adjacent services such as customs and compliance, rail and road, and warehousing.
  • The logistics industry currently operates with a relatively low level of digitization, but we see the process of digitization as largely inevitable.

Bears say

  • The logistics industry is still in the early stages of digitizing, meaning there is high uncertainty as to how large the market opportunity will be for WiseTech’s current and future products.
  • Following the resignation of founder White from the CEO role and his transition to the board as executive chairman, it is unclear whether the company will have the same level of executive leadership.
  • WiseTech’s hasn’t yet incorporated all of its acquisitions into the CargoWise product suite, and the return on those investments could be dilutive if they lack strategic attention.

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Terms used in this article

Star Rating: Our one- to five-star ratings are guideposts to a broad audience and individuals must consider their own specific investment goals, risk tolerance, and several other factors. A five-star rating means our analysts think the current market price likely represents an excessively pessimistic outlook and that beyond fair risk-adjusted returns are likely over a long timeframe. A one-star rating means our analysts think the market is pricing in an excessively optimistic outlook, limiting upside potential and leaving the investor exposed to capital loss.

Fair Value: Morningstar’s Fair Value estimate results from a detailed projection of a company’s future cash flows, resulting from our analysts’ independent primary research. Price To Fair Value measures the current market price against estimated Fair Value. If a company’s stock trades at $100 and our analysts believe it is worth $200, the price to fair value ratio would be 0.5. A Price to Fair Value over 1 suggests the share is overvalued.

Moat Rating: An economic moat is a structural feature that allows a firm to sustain excess profits over a long period. Companies with a narrow moat are those we believe are more likely than not to sustain excess returns for at least a decade. For wide-moat companies, we have high confidence that excess returns will persist for 10 years and are likely to persist at least 20 years. To learn about finding different sources of moat, read this article by Mark LaMonica.