Hub24 (ASX:HUB) share price slides despite record growth

The Hub24 (ASX: HUB) share price has pulled back after the release of the company’s Q3 results for FY21. Let’s take a closer look.

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The Hub24 Ltd (ASX: HUB) share price started the day in the green but has since slumped. At the time of writing, shares in the fintech company are trading at $23.97 – down 1.28%.

Today’s share price movement comes following the company’s release of its FY21 third quarter (Q3) results. For context, the S&P/ASX 200 Index (ASX: XJO) is also trading lower, down 0.36%.

Let’s take a closer look at today’s announcement.

Hub24 share price rollercoaster

The Hub 24 share price is on a wild ride today despite the company announcing a 41% increase in net cash inflows on the prior corresponding period (pcp) to $1.9 billion. During all of FY21, the average monthly net inflows were $556 million, up 35% on FY20’s monthly average.

The company advised it now manages $51.4 billion worth of funds – up 236.7% on the pcp. This includes $17.2 billion brought in by Xplore Wealth, which Hub24 acquired during the quarter. Platform funds under administration ($35.6 billion) were up 136% on the pcp. The remaining $15.8 billion of funds was via portfolio, administration and reporting services. 

According to Hub24, from December 2019 to now, its market share has increased from 1.75% to 2.5%. Including Xplore Wealth, the company’s total market share is 4.3%.

Other updates

Hub24 also confirmed it now owns one-third of all shares in Easton Investments Ltd (ASX: EAS). Hub24 will now share its HUBconnect Insight compliance monitoring software with Easton.

As well, the company plans to launch its investment and superannuation offering with IOOF Holdings Limited (ASX: IFL) in the last quarter of FY21. Hub24 is also collaborating with Aberdeen Standard Investments Australia Limited on a “bionic advice solution”. Hub24 hopes the new offering will facilitate the entering of new customer segments.

Finally, the Clearview Wealth Ltd (ASX: CVW) “bulk transaction” (approximately $1.3 billion) is also expected to be completed in the last quarter of this financial year.

Investors will likely be keeping an eye on the company’s expansion plans to see whether they translate to growth in the Hub24 share price.

Hub24 share price snapshot

Over the past 12 months, the Hub24 share price has appreciated by around 145%. The share price is, however, around 11% lower than it was in mid-February this year.

Shares in the company went from $26.86 on 15 February to bottom out at $19.48 by 5 March. A swift recovery (the Hub24 share price closed at $25.45 on 17 March) was followed by another fall. By 30 March, shares were valued at $19.89 each. Since then, the company’s value has recovered to its current level.

Hub24 has a market capitalisation of $1.7 billion.

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Marc Sidarous 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 has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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