The Hub24 Ltd (ASX: HUB) share price has risen more than 3% today in what has been a very positive day for the ASX 200, which looks as though it will end up more than 1%.
Since the start of the year the Hub24 share price has risen 14.6%, although it was up much further at the start of May, it has fallen back 14% since then.
Investors may have thought that the financial technology business was on its way to the moon after the Royal Commission was seemingly going to put the sword to the big four banks of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) as well as AMP Limited (ASX: AMP).
Whilst it's not as though the banks completely got away with it – just look at all the remediation costs – the end result probably wasn't as favourable to Hub24 as it seemed that it would be.
Even so, Hub24 revealed a record March 2019 quarter with net inflows of $793 million, which was an increase of 33.3%. Funds under administration (FUA) reached $11.5 billion at 31 March 2019, an increase of 55.7%. I think any business would be pleased with growth of those numbers.
During the quarter Hub24 also signed 19 licensee agreements including agreements with two stockbroking firms, two large advice licensees and a rapidly growing advice practice aggregator.
Foolish takeaway
Obviously Hub24 comes with a fairly expensive price tag for the growth that it's achieving. It's trading at an estimated 56x FY20's estimated earnings. This is too expensive for me to consider investing, particularly as I'm not sure how far Hub24 can grow over the medium-term.
