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HUB24 shares are up 1167% in 5 years. Should you buy?

The HUB24 Ltd (ASX: HUB) share price has been quietly climbing higher for a number of years now.

While the focus has been on CSL Limited (ASX: CSL) or Afterpay Ltd (ASX: APT) shares taking off, the investment platform provider has been consistently delivering for shareholders.

HUB24 shares were smashed on the ASX yesterday despite posting record net inflows of $2.49 billion in the first half of FY20. The Aussie fintech now posts funds under administration (FUA) of $15.8 billion with a phenomenal growth story.

So, how did HUB24 become one of the hottest ASX growth stocks and is there still time to buy HUB24 shares?

Why HUB24 shares have surged higher

In the last 5 years, HUB24 shares have climbed a whopping 1,167.42% higher. Those are incredibly strong numbers, particularly given that doesn’t include its 0.41% dividend yield.

Meanwhile, investment platform rival Netwealth Ltd (ASX: NWL) now boasts funds under administration of $25.3 billion. Since its IPO in November 2017, the Netwealth share price has continued to surge. Netwealth was floated at $3.70 per share, which translates to a 115.95% gain in just over 2 years.

The key to success for both Netwealth and HUB24 shares has been growing their platform numbers. Both groups have expanded their FUA numbers and continue to add users.

HUB24 shares have also benefitted from wholesale changes in the financial planning industry. The 2018 Financial Services Royal Commission hit the sector hard and triggered an overhaul.

Numerous conflicts of interest were unearthed and the regulatory changes since have benefitted HUB24 and Netwealth. This has helped FUA for the platform providers continue to climb, despite a shrinking industry. 

Is now the time to buy?

There’s no doubt that HUB24’s growth is impressive in recent years. However, HUB24 shares do trade at a high price-to-earnings ratio of 99.8 times.

Given the potential growth, that may well be justified, but I’d be waiting until its February earnings results before buying in.

If you're looking for the next HUB24 or Netwealth, check out these 5 bargain ASX stocks for the right price today.

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Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia owns shares of Netwealth. The Motley Fool Australia has recommended Hub24 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.

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