Despite operating in a sector benefiting from structural tailwinds, the ASX small-cap's share price has fallen more than 35% from its recent peak. For many investors, that kind of decline can raise red flags.

But dig a little deeper, and the underlying business appears to be telling a very different story.

What does Energy One actually do?

Energy One is not your typical energy company.

Rather than producing or supplying power, it provides software, outsourced operations, and advisory services to wholesale energy, environmental, and carbon trading markets across Australia and Europe.

Its platform helps participants manage complex tasks like trading, market communication, and power plant operations — effectively acting as digital infrastructure for increasingly sophisticated energy markets.

As grids become more decentralised and volatile, software like this becomes more critical.

Strong results hiding behind the share price fall

While the share price has pulled back, recent financial results paint a picture of a business gaining momentum.

For the latest half, Energy One reported:

• Revenue of $34.8 million, up 21%
• Annual recurring revenue (ARR) of $64.0 million, up 20%
• Operating margins (EBITDA margin) expanding to 21%
• Underlying net profits (underlying NPAT) of $4.5 million, up 56%
• Net debt reduced to $5.8 million (down $7.2 million)

This is the kind of profile investors often look for in small-cap software businesses: recurring revenue, expanding margins, and improving balance sheet strength.

In particular, the growth in ARR suggests increasing visibility and predictability, which can be valuable in more uncertain market environments.

Why the disconnect?

So why has the share price gone backwards?

There's no single answer, but a few themes may be at play.

First, ASX small-cap tech and software names have been under pressure more broadly as interest rates rise and expectations remain elevated. Higher discount rates can weigh on valuations, particularly for growth-oriented businesses. 

Second, Energy One operates in a niche that doesn't always attract widespread attention. Unlike high-profile AI or consumer tech names, its role in energy market infrastructure is more behind the scenes. 

And finally, the software industry as a whole has faced valuation headwinds in the face of AI disruption. Sentiment against software as a service (SaaS) stocks turned negative in early this year, described as a "SaaSpocalypse", driven by fears that AI tools will disrupt the traditional software business model. 

Broker sees potential upside

Interestingly, at least one broker sees the current weakness as an opportunity.

Ord Minnett has placed a buy rating on the stock with a price target of $21.58, implying potential upside of more than 50% over the next 12 months.

The broker also highlighted the company's margin expansion and its position as a profitable, cash-generative business growing revenue at over 20% annually.

That combination — growth plus profitability — is not always easy to find in the ASX small-cap universe.

The bigger picture

Zooming out, Energy One sits at the intersection of several long-term trends.

Energy markets are becoming more complex, driven by electrification, renewables, and decentralisation. That complexity tends to increase demand for software, data, and automation.

If that theme continues to play out, companies providing the "plumbing" of these markets could quietly benefit.

Of course, small caps come with their own risks — including execution, competition, and market volatility.

But with strong recent growth, improving margins, and a share price well below its highs, this ASX small cap may be one to keep on the radar.

The post This energy focussed ASX small-cap could surge 50% as earnings build appeared first on The Motley Fool Australia.

Here's what the broker is recommending to clients:

Energy One Ltd (ASX: EOL)

Ord Minnett thinks that Energy One could be an ASX All Ords share to buy.

It is a provider of software products, outsourced operations, and advisory services to wholesale energy, environmental, and carbon trading markets in Australia and Europe.

In addition, the company provides a power plant management system that manages daily market communication, intraday and day-ahead trading, and nominations for power plants.

The broker has put a buy rating and $21.58 price target on its shares. This implies potential upside of over 50% for investors over the next 12 months.

Commenting on its buy recommendation, the broker said:

A key pillar of our investment case has been margin expansion potential as Europe margins converge with the more mature Australian and the latest result confirmed this, but EBITDA margins in its Australian business also expanded by 200bp on a year. ‍ We incorporate a minor (~1%) downgrade to revenue in FY26 due to lower-than-anticipated installations in the first half but have upgraded our net profit estimates due to stronger margins in both regions.

Energy One remains a profitable, free-cashflow-generative, and highly defensible business growing its top line at more than 20% per annum. In addition, the stock offers defensive appeal in the face of threats to the software sector from AI. We reiterate our Buy recommendation.

Service Stream Ltd (ASX: SSM)

Another ASX All Ords share that Ord Minnett is positive on is Service Stream.

It is an infrastructure network specialist across the telecommunications, utilities, and transport sectors in Australia.

The broker recently put a buy rating and $2.50 price target on its shares. Based on its current share price of $1.94, this suggests that upside of almost 30% is possible between now and this time next year.

Ord Minnett believes the company is well-placed to increase in return on equity and generate significant free cash flow. It also feels that "Service Stream's trading multiple of ~18x FY26 earnings represents compelling relative value." Commenting on its buy recommendation, the broker said:

The long-term strategy to raise the revenue skew to O&M [operations and maintenance] style contracts is now largely complete. We see returns on equity rising to 15–16% in FY27, aided by a full-year contribution of the Defence Department contract. We see free cashflows of more than $80 million in FY27 and balance-sheet capacity to support a mix of M&A, a higher dividend payout ratio and organic growth initiatives. We reiterate our Buy recommendation.

The post Ord Minnett tips these ASX All Ords shares to rise 30% to 50% appeared first on The Motley Fool Australia.

On the flip side, it's been a tough year for Australian technology and healthcare shares. 

The S&P/ASX All Technology Index (ASX: XTX) has dropped almost 11% in 2025, including more than 20% since October. 

Similarly, the S&P/ASX 200 Health Care Index (ASX: XHJ) is down more than 24% since January. 

But amidst these struggling sectors have been some diamonds in the rough. 

Let's look at some of the winners from these two sectors in 2025. 

Healthcare winners

One of the best performing ASX shares in 2025 has been 4DMedical Ltd (ASX: 4DX). 

The medical technology company works in the field of respiratory imaging and ventilation analysis in the treatment of lung and respiratory diseases.

The Motley Fool's Aaron Teboneras reported earlier this month on the consistent run of positive results and milestones hit by the company this year. 

Regulatory approvals and new commercial partnerships have expanded its markets and validated its technology, shifting investor views from speculative potential to increasingly visible and growing software revenue.

This has launched the stock almost 680% higher in 2025. 

Despite this unbelievable run, it's still drawing optimism for future growth.

Another healthcare stock winner this year has been Racura Oncology Ltd (ASX: RAC). 

It is an Australian clinical-stage biopharmaceutical company focused on developing cancer treatments.

It has risen almost 100% in 2025, meaning investors almost doubled their returns holding this stock through the year. 

This has been driven by promising scientific research and private placement offers.

Technology winners

Meanwhile, in the technology sector, one of the best-performing ASX shares has been Elsight Ltd (ASX: ELS). 

The company technically sits in the information technology sector, but has risen thanks to tailwinds in the defence sector. 

The company offers advanced communication components for unmanned systems (aerial, ground, and sea) through its flagship product – the Halo platform. 

Its rise has been fuelled by major contract wins, including a US$21.2M contract for CY2026. 

CY25e also marked a pivotal inflection point for the company, achieving profitability and delivering estimated revenue growth of 12x YoY (BPe). 

Its share price has risen by more than 750% this year. 

Finally, another technology stock that has enjoyed a stellar year is Energy One Ltd (ASX: EOL). 

It is a supplier of software products and services to wholesale energy, environmental, and carbon trading markets.

It reported strong growth in the 2025 financial year, reporting revenue growth of 17% to $61.4 million and annual recurring revenue (ARR) rising 22% to $60.4 million.

Its share price is up more than 150% this year. 

The post Why did these ASX shares outperform their peers in 2025? appeared first on The Motley Fool Australia.

The company is a global provider of software products, outsourced operations, and advisory services for wholesale energy, environmental, and carbon trading markets. Its solutions support energy participants across Europe, the UK, and the Asia-Pacific region.

In the last 12 months it has soared almost 180%. 

The surge has been thanks to a strong financial performance. Revenue growth fuelled a surge in profitability, driven by the operating leverage of the software business.

In FY25, the company reported revenue growth of 17% to $61.4 million and annual recurring revenue (ARR) jumped 22% to $60.4 million.

EBITDA rose by 57% to $10.5 million, and net profit after tax (NPAT) increased by 74% to $5.9 million.

Bell Potter initiates coverage

The surging ASX technology stock has drawn the attention of Bell Potter. 

The broker issued a new report on Thursday last week that included a buy recommendation and price target of $20.80. 

Shares closed last week at $17.58, which means the broker sees an upside of approximately 18.31%. 

The broker said the company now has more than 450 customer installations in 30+ countries with 12 different products available. 

The company's value proposition is flexibility, speed of implementation and the removal of complexities. EOL's 'one-stopshop' approach is a key differentiator against more pure-play competitors.

The company delivers software and services which are crucial to the operations of its customers. Without it, customers are unable to perform day-to-day. 

Bell Potter believes as a result, Energy One intimate client offering has high switching costs leading to a sticky customer base as evidenced by its historically low churn. 

Emerging tailwinds 

Bell Potter also has optimism around the leverage of this ASX technology stock to decarbonisation tailwinds. 

EOL is well placed to benefit from the rising share of renewable energy in the global energy system. The variability and intermittency of renewables increase market complexity and volatility, driving demand for reliable software and operational support.

It said Europe's recent quadrupling of its electricity trading windows enhances this company's opportunity to sell, cross-sell and up-sell its product suite.

Bell Potter believes the 'mission-critical' nature of Energy One's offering provides a resiliency to its earnings and an ability to push through necessary price increases.

Potential catalysts for further upside include further M&A in Europe to hasten expansion and management commentary ensuring confidence in their ambitious cash EBITDA margin target.

The post Bell Potter just initiated coverage with a buy recommendation for this ASX technology stock appeared first on The Motley Fool Australia.

One of the fund managers that likes Energy One is Wilson Asset Management, which is also called WAM. The investment team described Energy One as a business that provides mission-critical software and services to energy and utilities companies that are engaged in energy trading.

Wilson Asset Management said that the ASX tech share has delivered strong and consistent growth. WAM is expecting a lot more from the business.

Strong financial performance

In the 2025 financial year, the company reported revenue growth of 17% to $61.4 million and annual recurring revenue (ARR) jumped 22% to $60.4 million.

The rise in revenue helped its profitability surge, thanks to the operating leverage nature of a software business.

For the 12 months in FY25, Energy One's cash operating profit (EBITDA) jumped by 57% to $10.5 million, while net profit after tax (NPAT) increased by 74% to $5.9 million.

Why the ASX tech share has an exciting future

The fund manager said that the company has continued to expand in Europe, with expectations that the region will be a major contributor for growth in the coming years.

In September 2025, Energy One shares benefited from index-flow tailwinds after being added to the S&P/ASX All Technology Index (ASX: XTX) on 22 September 2025.

The investment team from Wilson Asset Management said:

Longer term, we think this is a compelling investment as a fast growing and highly profitable technology company benefitting from the growth in renewable energy.

The ASX tech share said it's starting FY26 with a strong pipeline and order book. Sizeable deals that were expected to be billed in FY25 were signed late in the year, or July, which will now be billed in FY26. It said $4 million of ARR signed (or in-contract) implies ARR growth of 7% already in FY26. The company also highlighted $1.7 million of new project revenue as well as in-flight projects spanning financial years.

If all signed and delivered, this gives the ASX tech share 9% revenue growth already in FY26.

The company said inorganic growth is in focus for the year ahead, scaling up through disciplined acquisitions and/or strategic joint ventures and partnerships.

The ASX tech share said that its "trajectory of 15% to 20% revenue growth and margin expansion remains a key focus in FY26."

Overall, the company has a very exciting future in the year ahead and beyond.

The post Why this ASX tech share is an exciting buy right now appeared first on The Motley Fool Australia.

On Friday, several ASX tech stocks ripped to new highs after the Nasdaq Composite Index (NASDAQ: .IXIC) hit a record the previous night.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) fell 1.03% over the week to close at 8,773.5 points on Friday.

The energy sector was the biggest drag last week, falling 4%, after the foreign takeover bid for Santos Ltd (ASX: STO) was withdrawn.

Just three of the 11 market sectors finished the week in the green.

Let's recap.

ASX 200 technology shares led the market last week

Tech sector darling Life360 Inc (ASX: 360) was among 9 ASX 200 shares that reached multi-year high share prices on Friday.

The Life360 share price rose 5.3% over the week to close at $51.96, after reaching a record $52.40 during intraday trade on Friday.

Nextdc Ltd (ASX: NXT) shares set a new 52-week high of $18.22 on Friday, and rose 2.8% over the week to finish at $17.81.

The Siteminder Ltd (ASX: SDR) share price reached a four-year high of $7.20 on Friday before closing at $7.14, up 3% over the week.

The Betashares S&P/ASX Australian Technology ETF (ASX: ATEC) also reached a new record of $33.42 per unit on Friday.

ATEC, which seeks to track the S&P/ASX All Technology Index before fees, was among 68 ASX ETFs that smashed records on Friday.

Several ASX small-cap tech shares also hit new highs on Friday.

The Hansen Technologies Ltd (ASX: HSN) share price closed at a four-year high of $6.22 on Friday, up 7.4% for the week.

Energy One Ltd (ASX: EOL) shares reached an all-time high of $18 on Friday before closing at $17.95, up 11.8% over the week.

Infomedia Ltd (ASX: IFM) shares closed at a 52-week high of $1.72, up 2.4% over the week.

Eroad Ltd (ASX: ERD) shares reached a three-year high of $2.63 on Friday before finishing the session at $2.55, up 8.1% last week.

Other tech sector price changes

Turning our attention to large-cap ASX 200 tech shares, WiseTech Global Ltd (ASX: WTC) lifted 1.4% over the week to close at $96.30.

The Xero Ltd (ASX: XRO) share price inched up 0.3% to $162.59.

TechnologyOne Ltd (ASX: TNE) shares rose 0.8% to $38.35.

Codan Ltd (ASX: CDA) shares fell 3.1% to $29.98.

The Megaport Ltd (ASX: MP1) share price lifted 0.8% to $15.01.

The Catapult Sports Ltd (ASX: CAT) share price increased 4.4% to close at $7.09.

The Iress Ltd (ASX: IRE) share price rose 2.4% to $9.34.

Macquarie Technology Group Ltd (ASX: MAQ) shares rose 5.5% to $65.07 ahead of their departure from the ASX 200.

Macquarie Tech is among 9 shares leaving the ASX 200 in the next index rebalance, effective tomorrow.

ASX 200 market sector snapshot

Here's how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

The post Life360, NextDC, and Siteminder shares reach new highs amid tech sector lead last week appeared first on The Motley Fool Australia.

The Energy One Ltd (ASX: EOL) share price is on fire this session. Last week, Energy One shares closed at $4.05 each. But today, those same shares opened at $5.32 and are currently up at $5.40. That's a gain worth a whopping 33.33%.

Energy One is a tech share that supplies software and services for use within wholesale energy, environmental, and carbon trading markets

So what on earth is going on here that has seen this ASX tech share rip 33% higher so far today?

ASX tech share rockets after receiving takeover proposal

Well, it seems Energy One shareholders have a takeover proposal to consider right now, which looks like it is the source of this dramatic share price rise that we are seeing.

This morning, Energy One announced that it had received a "confidential, indicative, incomplete, conditional and non-binding proposal" from global investment firm STG to acquire all issued shares of Energy One for an indicative price of $5.85 per share in cash.

That price represents a 44.44% premium over the $4.05 share price that Energy One closed at last Friday.

The announcement describes Energy One's suitor, STG, as a company with "US$10 billion of assets under management and a portfolio that includes software and software-enabled services companies".

In addition to advising investors of this proposal, Energy One's management has also told shareholders that "the Indicative Proposal, if formalised into a binding offer, represents compelling value to shareholders". That's thanks to the significant share price premium discussed above, as well as the "~76% premium to the 3 month volume weighted average price of Energy One's shares prior to 25 August 2023 of A$3.33".

STG isn't the only one…

STG has now been granted an "expedited period of exclusivity" by the Energy One board so that ATG can complete due diligence work. Saying that, Energy One has also revealed that STG wasn't the only party showing an interest in Energy One this year and that others have enjoyed "access to management and comprehensive information".

Energy One's management has told investors that they do not need to take any further action just yet. So stay tuned for any further developments here. But it's certainly been a great start to the week for Energy One shareholders this Monday.

The Energy One share price is now up a healthy 20.22% in 2023 so far, and up 3.05% over the past 12 months:

The post The small ASX tech share ripping 33% higher amid a takeover bid appeared first on The Motley Fool Australia.

• The Energy One share price is rising 6.2% today
• Energy One has entered a share purchase plan to take over CQ Energy Group
• The total cost of the acquisition is $36 million

The Energy One Ltd (ASX: EOL) share price is soaring today amid news the company has entered an agreement to take over an energy services company.

The company's shares are trading at $6 in morning trade, up 6.2%. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 0.39% at the time of writing.

Sydney-based Energy One supplies software and services to energy, environment and carbon trading markets in Australia, the United Kingdom and Europe.

Let's take a look at what the energy company revealed to the market today.

Energy One share price rises on acquisition

The company announced it will take over CQ Energy Group based in Adelaide. Energy One said it has entered a share purchase agreement to acquire 100% of CQ Energy Group.

CQ Energy provides 24-hour operational energy services to the Australian gas and electricity sector and has 20 staff and more than 30 customers, including wind farms, solar farms and industrial gas providers. Energy One describes the new addition as its "largest acquisition to date".

The acquisition is the latest in a string of takeovers by Energy One. The company took over Belgium-based Egssis in December 2021 and French-based eZ-nergy in June 2020.

Commenting on the latest takeover, group chief executive officer Shaun Ankers said:

The acquisition of CQ Energy builds on our strategy of developing a global 24/7 energy software and services business.

CQ enhances our capability and now provides us with the opportunity to establish a global energy services operation with control rooms in both the northern and southern hemispheres.

Energy One said the $36 million purchase includes cash and equity over 12 months. The initial outlay involves $26.4 million in cash and $6 million in Energy One shares.

Speaking on the new team, Ankers added:

CQ Energy is a very sophisticated business providing high quality operational services to the Australia [sic] energy trading market (West Coast and East Coast). And we are very excited to welcome them into the family.

I'd like to welcome Reza Evans, Ian Tannebring & Lino Fusco to our leadership team.

Energy One predicts the CQ acquisition will add about $7 million revenue and $4.5 million in earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first financial year after consolidation. Overall, it is expected to grow its current EBITDA by about 50%.

Share price snapshot

Shares in Energy One have slipped 3.07% in the past 12 months. In the past month they have fallen 1.15%, while they've dropped 2.44% in the past week.

For perspective, the ASX 200 has returned 5.18% in the last 12 months.

Energy One has a market capitalisation of about $159 million based on its current share price.

The post Energy One (ASX:EOL) share price gains 6% on acquisition news appeared first on The Motley Fool Australia.