Australian investment firm Ord Minnett has maintained its Buy recommendation on RAS Technology Holdings (ASX:RTH), setting a price target of AUD 1.73 per share. With RAS Technology Holdings closed around AUD 0.815 as on 5 March 2026, that target implies upside of more than 112%. So, what exactly is driving this bullish call, and should investors be paying attention to this small-cap ASX software stock?

Let's unpack the full analyst thesis, the half-year numbers behind it, and what the LeoVegas deal could mean for the company's future.

What Does RAS Technology Holdings Actually Do?

Before diving into the Ord Minnett analysis, it helps to understand what RAS Technology Holdings is. RTH is an ASX-listed software company that provides technology solutions to the wagering, racing, and sports betting industries. The company operates across three core business segments: Enhanced Information Services (EIS), Wagering Technology, and Digital & Media.

Think of RAS Technology Holdings as the picks-and-shovels play in the online gambling and racing data space. Rather than taking bets themselves, they build the technology infrastructure that wagering operators rely on. This includes data feeds, digital platforms, content delivery systems, and back-end wagering technology.

The company has been growing rapidly, with annual recurring revenue climbing at more than 30% year-on-year. That kind of growth rate in a software business especially one with 76% gross margins tends to attract analyst attention.

 What Did Ord Minnett's Research Note Say?

Ord Minnett published its research update on 28 February 2026 following RTH's first-half FY26 results. The note, authored by analyst Milo Ferris, carried the title "Viva LeoVegas" a clear nod to the milestone international agreement that has the analyst team excited.

The headline takeaway: Ord Minnett retained its Buy recommendation on RAS Technology Holdings while trimming the price target by 5% from AUD 1.82 to AUD 1.73 per share. Even with the slight reduction, that target still implies the stock could more than double from its current trading price.

The slight trim to the price target came from two factors. First, Ord Minnett increased the risk-free rate in its discounted cash flow (DCF) model to 4.8%. Second, the analysts adjusted revenue forecasts for FY27 and FY28 downward by 4% and 5% respectively to account for the ending of the Stake partnership. But here's the thing even after those adjustments, the analysts still see enormous upside in this stock.

 The 1H26 Results: Growth Across Every Segment

The half-year results were the immediate catalyst for the research update, and the numbers tell a compelling story about RAS Technology Holdings.

Annual recurring revenue hit AUD 24.6 million, growing 34% year-on-year and coming in 6% above Ord Minnett's own estimate of AUD 23.2 million. When a company beats analyst expectations on its most important metric, that's a positive signal.

What made the ARR result particularly impressive was that growth was broad-based. It wasn't driven by a single lucky contract or one standout division. All three business segments contributed meaningfully.

Enhanced Information Services, the company's largest division, reached AUD 14.7 million in ARR, up 18% year-on-year. Wagering Technology surged to AUD 7.5 million, a striking 67% increase. And Digital & Media, the smallest but fastest-growing segment, hit AUD 2.4 million, an 85% jump from the prior corresponding period.

Revenue for the half came in at AUD 13.9 million, up 38% year-on-year and broadly in line with Ord Minnett's AUD 14.0 million estimate. Gross profit of AUD 10.6 million was delivered at a 76% margin, actually beating the analyst's forecast of 74%. Lower-than-expected costs of goods sold drove the outperformance at the gross profit line.

Why Was EBITDA Below Expectations?

Now, it wasn't all sunshine. EBITDA of AUD 0.8 million came in well below Ord Minnett's estimate of AUD 2.1 million. Cash EBITDA told a similar story, landing at negative AUD 1.0 million versus the forecast of AUD 0.6 million positive. Operating cash flow of AUD 0.5 million and free cash flow of negative AUD 1.3 million also missed the mark.

So why is Ord Minnett still bullish on RAS Technology Holdings despite these misses?

The answer comes down to context. Management explicitly attributed the higher operating expenses up 43% year-on-year to deliberate reinvestment in growth. The company increased headcount and spending to support its trading capabilities, technology platform development, and expansion into Asian markets.

Ord Minnett acknowledged this, noting that operating expenses grew at 43% while revenue grew at 38%, pushing the opex-to-revenue ratio from 70.4% to 73%. The analysts flagged this as something to watch but ultimately accepted management's explanation that these are growth investments, not structural cost blowouts.

For a company trading on just 0.9x FY27 estimated enterprise value to revenue, Ord Minnett's view is essentially that the market is undervaluing the top-line growth trajectory and overweighting short-term profitability concerns. When you're growing recurring revenue at 34% annually with 76% gross margins, there's a reasonable argument that investing in future growth is the right strategic call.

 The LeoVegas Deal: A Potential Game Changer for RTH

The centerpiece of Ord Minnett's bullish thesis on RAS Technology Holdings is the new partnership with LeoVegas. This is what the analyst team is most excited about, and it's worth exploring in detail.

LeoVegas is a major international online gambling operator. The deal includes BetMGM UK and BetUK, significantly expanding RTH's footprint in the United Kingdom wagering market. The contract is expected to go live in mid-2026 and is anticipated to deliver material upside to revenue.

Here's what makes this deal particularly interesting. RTH's existing deal with Stake one of the largest online gambling platforms globally is set to conclude in FY27 (ending May 2026 specifically). That's created an overhang on the stock, with investors worried about the revenue gap once Stake departs.

The LeoVegas contract directly addresses this concern. Management believes the LeoVegas deal could be as large as the Stake partnership in total revenue potential. But here's the kicker under the LeoVegas agreement, RAS Technology Holdings will retain 100% of revenue generated. That's a fundamental improvement compared to the revenue-sharing structure of the Stake agreement where RTH had to split proceeds.

In other words, even if the LeoVegas deal generates identical gross revenue to Stake, the net revenue to RTH shareholders would be substantially higher. This is a structural improvement in the quality of earnings, not just a replacement of lost revenue.

Ord Minnett has started modelling LeoVegas revenue from FY26 onwards but notes the figures don't yet fully offset the Stake partnership loss. The analysts appear to be taking a conservative approach to the LeoVegas revenue ramp, which could leave room for positive surprises if the deal scales faster than expected.

 Is RAS Technology Holdings Undervalued on the ASX?

One of the most striking aspects of the Ord Minnett analysis is the valuation disconnect. RAS Technology Holdings trades at approximately 0.9x FY27 estimated EV/revenue. For a software company growing revenue at more than 30% annually with 76% gross margins, that multiple looks remarkably low.

To put this in perspective, comparable ASX-listed software companies with similar growth profiles typically trade at multiples several times higher. The EV/EBITDA multiple is projected to fall from 16.5x in FY26 to just 8.1x in FY27 as profitability scales. The normalized P/E ratio drops to 11.9x on FY27 estimates. For a growth software stock, these are value territory metrics.

Ord Minnett uses a DCF valuation methodology with a WACC of 9.4% (comprising a 10.8% cost of equity and 6.2% after-tax cost of debt). The resulting AUD 1.73 price target sits 112.26% above the current share price. That's an unusually wide gap between target and trading price, even for a small-cap stock.

The balance sheet provides additional comfort. RTH ended the half with AUD 4.4 million in cash and no debt. While this is down from AUD 5.7 million at the end of FY25, the company has a clean balance sheet with no leverage risk. Net debt to equity is significantly negative across all forecast periods, meaning the company has more cash than obligations.

 What Are the Risks Investors Should Consider?

Ord Minnett assigns a "Higher" risk rating to RAS Technology Holdings, and investors should understand what that means. The risk classification reflects the company's small market capitalization of just AUD 37.7 million, limited daily trading liquidity of AUD 0.1 million, and the inherent uncertainty around key contracts.

The most obvious near-term risk is the Stake contract expiry. While the LeoVegas deal is designed to offset this, there's a transition period where revenue could dip before the new partnership fully ramps. Ord Minnett's FY27 revenue forecast of AUD 32.5 million actually shows a deceleration from AUD 29.7 million in FY26 growing just 9.2% compared to nearly 40% in FY26. This reflects the Stake headwind.

Operating expense management is another area to watch. The 43% jump in opex in 1H26 compressed margins significantly. If these costs don't translate into sustained revenue growth, there's a risk that profitability takes longer to materialize than the market expects.

The company's reliance on a relatively small number of large contracts also creates concentration risk. Losing a major client or failing to monetize the LeoVegas opportunity as expected could have an outsized impact on financial performance.

RTH's share price has also been under pressure, falling 21.3% over the past three months despite the broader ASX 200 returning 11.3% over the past twelve months. RTH's 12-month return of 7.9% has underperformed the benchmark. This kind of negative momentum can persist in small-cap stocks regardless of fundamentals.

 What Do the Forward Estimates Look Like?

Ord Minnett's financial model paints a picture of a company approaching an inflection point. Here are the key forward estimates that underpin the Buy recommendation on RAS Technology Holdings.

Revenue is forecast to grow from AUD 21.3 million in FY25 to AUD 29.7 million in FY26 and AUD 32.5 million in FY27. EBITDA is expected to expand from AUD 2.4 million in FY25 to AUD 2.5 million in FY26 and then inflect sharply to AUD 5.4 million in FY27. That's more than a doubling in EBITDA in a single year.

The real inflection shows up in earnings. Normalized net profit after tax is forecast at AUD 0.5 million in FY25, dipping to AUD 0.2 million in FY26 (reflecting the growth investment), then surging to AUD 3.1 million in FY27. Earnings per share follows the same trajectory a massive projected increase of over 1,200% from FY26 to FY27.

Return on equity is expected to jump from 1.6% in FY26 to 18.9% in FY27. That's a significant shift in capital efficiency that would make the stock far more attractive to institutional investors who screen for profitability metrics.

Gross margins are actually forecast to improve over time, rising from 75% in FY26 to 76% in FY27 and 77% in FY28. Part of this improvement comes from the removal of revenue-sharing obligations under the Stake deal and the higher-margin nature of the LeoVegas contract.

 How Does RTH Compare to Other ASX Small-Cap Tech Stocks?

In the context of the broader ASX small-cap technology sector, RAS Technology Holdings occupies an interesting niche. The company operates at the intersection of software-as-a-service (SaaS) recurring revenue and the high-growth online wagering industry.

Many ASX-listed software companies growing at 30%+ trade at significantly higher revenue multiples. The sub-1x EV/revenue that RTH trades on is more commonly associated with companies growing in single digits or facing structural challenges. Ord Minnett's thesis is essentially that the market is mispricing RTH's growth durability and the improving revenue quality from the LeoVegas partnership.

The 76% gross margin is also notable. This is firmly in premium software territory and suggests that RTH's technology products have strong pricing power and relatively low incremental delivery costs. Margins at this level provide significant operating leverage as revenue scales, a higher proportion flows through to profit.

 What Would Change Ord Minnett's View?

While the research note maintains a Buy, there are scenarios that could cause a downgrade. A failure to successfully onboard LeoVegas and ramp that contract to material revenue would undermine a key pillar of the thesis. Similarly, if operating expenses continue to grow faster than revenue without clear returns on investment, the path to profitability could extend further than the market's patience allows.

Competitive threats in the wagering technology space could also pressure RTH. The online gambling technology market is evolving rapidly, and larger players with deeper pockets could challenge RTH's market position. The company needs to continue innovating and winning contracts to justify its growth trajectory.

On the flip side, upside scenarios include the LeoVegas deal ramping faster than modelled, additional international contract wins beyond the current pipeline, and operating leverage kicking in sooner as the growth investments from 1H26 begin bearing fruit.

 Should You Buy RAS Technology Holdings Based on This Analyst Call?

It's important to note that a single broker recommendation should never be the sole basis for an investment decision. Ord Minnett's analysis is well-researched and provides valuable insight, but it represents one firm's view. There's currently limited consensus coverage on RTH given its small-cap status.

The stock carries higher risk, limited liquidity, and meaningful contract concentration. These factors mean that the potential upside comes with commensurate downside risk.

That said, the core elements of the bull case are clear: rapid recurring revenue growth across all segments, improving gross margins, a transformative international contract with LeoVegas, a clean balance sheet, and a valuation that appears cheap relative to the growth on offer. The Ord Minnett Buy recommendation on RAS Technology Holdings reflects a view that the market is significantly underpricing these qualities.

For investors comfortable with higher-risk, small-cap ASX technology exposure, RTH appears to be a name worth putting on the watchlist and digging deeper into.

*Disclaimer: This article is for informational purposes only and does not constitute financial advice. The author does not hold a position in RAS Technology Holdings (ASX: RTH). Always conduct your own research and consult a licensed financial adviser before making investment decisions. Past performance is not indicative of future results.*