At time of writing, the share price of WiseTech Global Ltd [ASX:WTC] is up 1.54%, trading at $31.57.
The WTC share price climbed as a new strategic partnership was announced with OFX Group Ltd.
WTC shares have now burst through previous resistance dating back to February:
We look at the details of the OFX deal.
WTC deal with OFX
Here is the key passage from the announcement today:
‘By integrating OFX’s digital solution within WiseTech’s CargoWise logistics execution platform, WiseTech’s customers will be able to make fast and low-cost international invoice payments in over 55 currencies. The process for making international payments will be significantly simplified, creating accounts payable efficiencies and a better customer experience.’
And the numbers:
‘The agreement is expected to generate at least $5m in annual Fee & Trading Income by FY24 and deliver material EBITDA growth. It will generate Fee & Trading Income in FY22 and FY23 as we onboard customers. The alliance will be supported by a capital expenditure investment of approximately $1m over the next 12 months funded by cash.’
Outlook for WTC share price
With the acceleration of e-commerce around the world — adding a payments string to the bow is probably a wise move.
This time though, it’s a strategic partnership, not an acquisition after several years of gobbling up smaller companies.
With plenty of upwards momentum, the WTC share price may look to crack the levels marked out below:
Another thing to consider is that the company is now trading at an earnings multiple of more than 61.
It’s a heady number, even by tech stock standards.
For Money Morning
PS: Wishing you’d tipped WTC early? Check out: Four Well-Positioned Small-Cap Stocks — these innovative Aussie companies are well placed to capitalise on post-lockdown megatrends. Click here to learn more.