HUB24 (ASX:HUB) share price gains attention on record platform net inflows

Did HUB24 report another record consecutive quarter? Here are the details…

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Key points

  • The HUB24 share price has reacted underwhelmingly to the company’s second quarter update
  • Total funds under administration reach $68.3 billion on record net inflows
  • Acquisition of Class Ltd is progressing with shareholders to vote at the end of the month

The HUB24 Ltd (ASX: HUB) share price is feeling flat today after the company released its second-quarter FY22 update this morning. However, trading volume is currently above average, suggesting heightened activity in the company’s shares this morning.

At the time of writing, the wealth management technology company’s shares are going for $26.97, up 0.45%.

HUB24 share price rallies on solid quarterly update

  • Record second quarter platform net inflows of $3.6 billion
  • Total funds under administration (FUA) at the end of December reaches $68.3 billion
  • Total FUA increases 118% compared to prior corresponding period
  • 28 new distribution agreements signed during the quarter
  • Integration of Xplore Wealth is on track
  • Scheme booklet distributed for the company’s proposed acquisition of Class Ltd (ASX: CL1)

What happened in the second quarter for HUB24?

Underpinning a solid quarter for HUB24, the company achieved record second-quarter platform net inflows of $3.6 billion. This represented a 127% increase on the prior corresponding period — though it is worth noting it includes flows from the Xplore acquisition.

In terms of total FUA, HUB24 now boasts $68.3 billion of total FUA at the end of the December quarter. This is comprised of $50 billion in Platform FUA, which grew by 128% year on year. In addition, the Portfolio, Administration and Reporting Services (PARS) segment also grew by 97% — making up the other $18.3 billion of FUA.

Impressively, today’s result marks the fourth consecutive quarter of record net inflows for the company. A byproduct of this tremendous growth is HUB24’s increasing market share. According to the announcement, market share has increased to 4.6%, up from 4.3%. This achievement bodes well for the HUB24 share price.

On another note, the company’s Xplore integration is going to plan. HUB24 expects the transition of Super FUA from Xplore to HUB24 to be completed during the fourth quarter of FY22.

Meanwhile, the next prominent event occurring for HUB24 will be its shareholder vote on the acquisition of Class Ltd. The vote is proposed to be held on 31 January 2022, with the board unanimously recommending shareholders vote in favour of the deal.

How have HUB24 shares performed recently?

The HUB24 share price has had a rocky start to 2022, falling 4.6%. The S&P/ASX 200 Index (ASX: XJO) is down 1.3% over the same time period.

While it is difficult to pin down exactly what the cause of the recent valuation weakness is, potentially HUB24 has been caught in the broader tech selldown.

However, the company continues to trade on a relatively rich price-to-earnings (P/E) ratio of 183 times.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Hub24 Ltd. The Motley Fool Australia owns and has recommended Class Limited. 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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