On Tuesday, RBC (TSX:RY) Capital adjusted its stance on WiseTech Global Ltd (WTC:AU), shifting the software company's stock rating to Sector Perform from its previous Outperform position. The firm also revised WiseTech's price target downward to AUD120.00, a decrease from the former AUD125.00 mark.
The downgrade comes in the wake of recent challenges faced by WiseTech, including a reduction in their financial year 2025 sales and EBITDA guidance by 6% and 8% respectively at the midpoint. The revision was attributed to delays in new product development, which have been linked to the personal circumstances of Richard White, the company's founder. White's situation has reportedly affected his ability to contribute to WiseTech's product development efforts.
Additionally, the company's board has completed an interim review that largely exonerates the founder from allegations concerning his behavior. However, the uncertainty regarding the duration of White's personal issues and their impact on the company's growth trajectory remains a concern for investors.
In a statement, RBC Capital noted the difficulty in assessing the ongoing influence of the founder's personal situation on WiseTech's growth. The firm stated, "Guide miss driven by new product delays as Richard White's personal situation has impacted his ability to support WTC's product development function."
The revised forecast for fiscal year 2025 revenue and EBITDA, which now anticipates a 6% and 8% decrease respectively, has led to the new valuation of AUD120 per share. RBC Capital's downgrade reflects the continued potential risks that could affect WiseTech's performance moving forward.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.