Operating Leverage, Product Expansion, and Pricing Power Underpin Buy Rating and $1.05 Target

In a report released yesterday, Caleb Weng from PAC Partners maintained a Buy rating on Raiz Invest Ltd., with a price target of A$1.05.

Caleb Weng has given his Buy rating due to a combination of factors, chiefly the successful price increases that lifted average revenue per user without triggering meaningful customer losses, which translated into strong revenue growth and high incremental margins given the largely fixed cost base. He also highlights that operating leverage remains substantial, with management still investing in growth-related expenses, suggesting further earnings expansion as revenue scales.

In addition, Weng points to upcoming launches of direct ASX trading and U.S. equities as key product catalysts expected to raise transaction revenue per client, support retention, and attract new users, thereby underpinning medium‑term top‑line and profit growth. He views current forecasts as conservative given momentum in customer metrics, rising funds under management and account balances, lower but more efficient marketing spend, and the sizeable tax loss balance that should reduce cash tax outflows, all of which support maintaining a Buy rating and a $1.05 price target.

Weng covers the Technology sector, focusing on stocks such as Raiz Invest Ltd., EPX, and Credit Clear Limited. According to TipRanks, Weng has an average return of 19.7% and a 57.89% success rate on recommended stocks.