Yesterday the Praemium Ltd (ASX: PPS) share price was one of the best performers on the local share market after the fintech company released a strong quarterly update. Today it has been the turn of the Hub24 Ltd (ASX: HUB) share price to race higher after the release of its respective quarterly update. At the time of writing the investment platform provider’s shares are up almost 6% to $10.75. What was in the update? During the third quarter HUB24 achieved net inflows of $595 million, an increase of 42% on the prior corresponding period and driven from both new…
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Today it has been the turn of the Hub24 Ltd (ASX: HUB) share price to race higher after the release of its respective quarterly update.
At the time of writing the investment platform provider’s shares are up almost 6% to $10.75.
What was in the update?
During the third quarter HUB24 achieved net inflows of $595 million, an increase of 42% on the prior corresponding period and driven from both new and existing advisers. Gross inflows during the period came in at $820 million.
This brought the total funds under administration (FUA) to $7.4 billion as of the end of the March quarter, representing growth of 58% on the prior corresponding period.
The growth during this quarter was especially impressive given that it is traditionally a seasonally soft quarter. Management believes this could be a sign of strong inflows for the remainder of FY 2018.
The update also provided a little colour on its market share gains from the previous quarter. Based on the latest available data, HUB24 captured 13.9% of net inflows in the December quarter, this increased its market share from 0.7% to 0.8% of FUA.
Clearly there is still a huge market opportunity for the company, though it may be unrealistic to think it could ever capture a double-digit share of the market in my opinion.
Should you invest?
As I said yesterday when covering Praemium’s quarterly update, I think HUB24 is one of the best options in the fintech industry and this result certainly backs up that opinion.
Given the strong demand the company is experiencing for its platforms, I expect it will continue growing at an above-average rate for a number of years.
This could put it up there with Bravura Solutions Ltd (ASX: BVS) and Praemium as one of the best options in the industry. But it is worth remembering that its shares are a little on the expensive side and carry a fair bit of risk because of this.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Bravura Solutions Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.