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Hub24 (ASX: HUB) Surpasses $100 Mark Following Record Inflow Results
On Tuesday, Hub24 shares soared past the $100 threshold for the first time, experiencing a notable 6.3% increase after the investment platform reported exceptional quarterly and annual inflows, surpassing analysts’ forecasts.
Impressive Inflows Catalyse Share Surge
In the fourth quarter of FY25, Hub24 announced platform net inflows of $5.3 billion, a 7% increase from the previous quarter and 8.1% above Citi’s estimate of $4.9 billion. For the entire fiscal year, annual platform net inflows reached an unprecedented $19.8 billion, denoting a remarkable 25% year-on-year growth and exceeding Citi’s projection of $19.3 billion by 2.5%.
Funds under administration (FUA) jumped 30%, reaching $136.4 billion as of June 30, 2025. This continues Hub24’s impressive growth trajectory, following FUA increases of 30% in FY24, 23% in FY23, and 32% in FY22.
RBC Capital Markets analyst Jack Lynch noted that a contributing factor to the quarterly results was an extra $300 million in inflows from EQT transitions, leading to total inflows of $5.3 billion, which was higher than the anticipated $5 billion. He observed that there were no signs of increased outflows from the high-net-worth sector, distinguishing Hub24’s performance from its competitors, which have been affected by wider market trends.
Continued Growth Indicators
Key performance indicators suggest that Hub24 is maintaining strong momentum. The gross inflows, excluding transitions, accounted for 7.5% of the starting FUA, while adviser growth was around 13%, pointing to solid distribution capabilities.
Analysts from E&P, Olivier Coulon and Shankari Thayakaran, suggested that these results indicate “better near-term trends on net flows due to lower outflows than Netwealth” and expect Hub24 to outperform in the coming period.
Valuation Concerns Arise
Despite the robust operational achievements, concerns about the stock’s valuation have surfaced. Prior to the recent rally, Hub24’s forward price-to-earnings ratio was around 63 times, which significantly exceeds its historical average of 45 times.
In the wake of the operational surge, various analysts adjusted their target prices while expressing concerns about valuation levels:
- Bell Potter upgraded their rating to Buy and raised their target price from $110 to $115, citing strong net flows, solid customer retention, and persistent demand amid market fluctuations.
- RBC Capital Markets maintained a Sector Perform rating but increased the target from $75 to $85, observing better-than-anticipated transitions and potential upward momentum from advisory reform incentives.
- Jefferies downgraded their rating to Underperform from Hold while increasing the target from $80 to $84, acknowledging record inflows and market share growth but viewing the valuation as excessive.
Robust Market Position and Future Potential
Hub24 is strategically positioned in a vast market, with the total platform sector in Australia estimated at over $1 trillion in funds under management. With less than 15% market share, there is significant potential for further growth.
The stock’s performance has been outstanding, rising 23% in the past month, 44% year-to-date, and an impressive 115% over the last twelve months.
However, the recent rally has placed the stock in overbought territory, as indicated by a Relative Strength Index (RSI) of 80, suggesting a potential for pullbacks despite the underlying strong fundamentals. Historical trends show that such volatility can follow major price movements; after a similar surge during the FY25 half-year results, the stock originally gained 13.6% only to close up 3.5% and drop 6% over the following days.
Although Hub24’s compelling growth narrative continues, investors should brace for possible price consolidation as the market adjusts to its premium valuation alongside solid operational performance. However, history indicates that corrections may present buying opportunities; the company has shown resilience through earlier downturns, such as a 15% drop in December 2024 and a nearly 30% decrease in April due to external economic concerns, bouncing back to achieve new highs in both cases.
Overall, Hub24’s strong fundamentals and substantial market opportunities underscore its investment potential, despite current valuation concerns.
