Is WiseTech (ASX:WTC) Still a Strong Tech Contender in the ASX200 Despite the Drop?

2 min read | May 05, 2025 12:02 PM AEST | By Team Kalkine Media

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Is WiseTech (ASX:WTC) Still a Strong Tech Contender in the ASX200 Despite the Drop? — Image source: shutterstock

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Highlights

(WTC) down over 23% YTD in 2025

Strong margins and global software footprint

Valuation dips below 5-year average

WiseTech Global (ASX:WTC) shares have declined 23.3% since the start of 2025, catching the attention of market watchers. As a key player in the ASX200, the drop in the share price may raise questions about the underlying performance and long-term potential of this tech business.

Founded in 1994, WiseTech Global is known for developing cloud-based logistics software solutions. Its flagship product, CargoWise, supports operations such as forwarding, customs clearance, warehousing, landside transport, and transport management. This comprehensive platform is used by 24 of the top 25 global freight forwarders and 46 of the top 50 third-party logistics providers, indicating its dominant position in the industry.

The information technology sector has stood out on the Australian Securities Exchange. Over the past five years, the S&P/ASX200 Information Technology Index has returned 13.05% annually, outperforming the broader ASX200, which delivered an 8.81% return. Tech companies like WiseTech benefit from characteristics that support scalability and profitability.

One key advantage is their high profit margins. For instance, WiseTech posted an 84.00% gross margin and a 37.30% operating margin in its most recent annual report. These figures are a result of a low-cost, software-driven model that minimizes traditional overheads like physical infrastructure.

Another strength lies in recurring revenues. WiseTech’s software-as-a-service (SaaS) structure generates consistent subscription-based income, improving financial predictability. Additionally, the company's products can be deployed across the globe with minimal barriers, leveraging the low-cost scalability that software businesses enjoy.

In terms of valuation, WiseTech currently trades at a price-to-sales ratio of 30.51x, compared to its five-year average of 31.86x. This suggests that its share price is trading below historical levels despite continued revenue growth over the last three years. While valuation metrics offer insight, they should be weighed alongside broader business fundamentals.

As some investors review their portfolios with a focus on dependable income, tech companies like WiseTech offer a different value proposition than more traditional ASX dividend stocks. However, they remain integral to a diversified strategy, especially given their role in driving innovation and efficiency across industries.

With its strong market presence, recurring revenue model, and global reach, WiseTech (WTC) continues to be a notable name within the ASX200, even amid recent market pressure.

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