WiseTech (ASX: WTC) held its 2025 investor day, where it provided investors with details on its new pricing model and updates on several of its new products. Shares jumped 5% on the day.

Why it matters: The new pricing model—first announced at full-year results—seems even more aligned with WiseTech’s CargoWise customers than its current model and the prior announcement of it. Promising new artificial intelligence features that come with the model should prove popular.

  • The new pricing model removes fixed fees, such as seat-based fees, allowing for closer alignment with usage. Customers only pay when they derive value from the platform, thus removing friction to adoption.
  • The pricing structure has also been radically simplified, which management believes will enable a so-called disbursement model, whereby CargoWise users pass on the cost to their own customers, effectively removing the costs for WiseTech’s customers.

The bottom line: We maintain our fair value estimate for wide-moat WiseTech of $138 per share with the latest developments in line with our thesis. Shares screen as materially undervalued, as corporate governance issues continue to cast a cloud over the business.

  • The disbursement model could provide upside by shifting WiseTech’s fees to deeper-pocketed end customers. But we believe software fees are already passed on indirectly as a regular cost of business. Direct disbursement for software-related fees is rare and unproven.

Big picture: We believe the company has significant latent pricing power. Freight forwarders need CargoWise to remain competitive in the industry and have no alternatives to drive similar productivity.

  • The company enjoys an extremely long reinvestment runway, as it still has a large share of the market to convert to its superior solution, and as it solves more problems for customers, such as through AI-driven automation, which we believe the industry is highly conducive to.

New pricing model is potentially disruptive for WiseTech

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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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.

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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.