Down 15% this month, are Netwealth shares finally a buy?

Is this a rare opportunity for investors?

| More on:
Smiling man sits in front of a graph on computer while using his mobile phone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Netwealth Group Ltd (ASX: NWL) shares have been among the best-performing long-term ASX 200 financial services stocks.

With experts continuing to warn that the big four banks are either fully valued or overvalued, investors may find themselves searching for alternatives. 

Over the past five years, Netwealth shares have soared more than 100%. There has been a strong upward trend during this period, with a few dips. 

Such dips have provided investors with rare opportunities to buy the ASX 200 stock at a discount. 

After falling 15% in the past month, today presents one such opportunity to buy Netwealth shares in the dip.

Why buy Netwealth shares?

Netwealth operates an investment platform that helps financial advisers manage client portfolios. 

It is widely recognised for its strong profitability and efficient operations, and remains debt-free.

Netwealth has been expanding its funds under administration (FUA) at a rapid pace. In FY25, FUA increased by 40%.

As of March 2025, Netwealth's total market share reached 8.7%.

Netwealth grew its number of accounts by 13% to 162,200, with its average account balance also up 14% to $662,000.

Looking forward, management expects FUA to grow at a similar pace in FY26, driven by continued investment in product and technology.

Is the valuation finally attractive?

There's no question that Netwealth is a high-quality business with strong growth prospects. 

However, for the majority of the past few years, its valuation has been elevated. 

After reviewing its FY25 result, Macquarie Group Ltd (ASX: MQG) placed a price target of $33.85 on the stock. 

This suggests around 11% upside from here. 

Netwealth also offers a dividend yield of 1.26%. 

Over the past 30 years, Australian shares have increased by an average of 9.3% according to Vanguard

Therefore, while a 12% total return may not be the most compelling opportunity, Netwealth shares could beat the market from here based on the market's historical average.

Those interested in building a position in Netwealth could certainly put some funds to work today and increase their position size should the ASX 200 stock become more attractively valued. 

Should I buy HUB24 instead?

Rival HUB24 Ltd (ASX: HUB) has delivered outstanding returns over the past five years, rising 500%. 

Hub24 shares are also down around 7% from their recent peak. 

However, with a price target of $103.30, Macquarie suggests HUB24 shares are slightly overvalued, given that they are currently trading above this. 

Therefore, between Netwealth and HUB24 shares, Netwealth is the better buy today, according to Macquarie's price targets. 

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24, Macquarie Group, and Netwealth Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and Netwealth Group. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

Two people shake hands making a deal about green energy.
Broker Notes

Does Macquarie rate AUB Group shares a buy after the deal fell through?

The AUB Group takeover deal is dead, but the business is very much alive, with Macquarie still seeing good value…

Read more »

Accountant woman counting an Australian money and using calculator for calculating dividend yield.
Financial Shares

Own AMP shares? Here's your financial calendar for 2026

Macquarie says the next catalyst for AMP shares will be the FY25 results on 12 February.

Read more »

Man putting in a coin in a coin jar with piles of coins next to it.
Financial Shares

This insurance company is a compelling buy, despite a takeover falling through, analysts say

This insurance company's shares are still looking like good buying, analysts say, despite takeover suitors walking away from a potential…

Read more »

Two children hold on tightly to books hugged against their chests, as if they were holding on to ASX shares for the long term.
Financial Shares

Own IAG shares? Here are the dividend dates for 2026

Mark these dates in your diary for the new year.

Read more »

Happy young woman saving money in a piggy bank.
Broker Notes

This ASX All Ords stock has more than doubled investors' money since January. Here's why it's tipped to surge another 45%!

A leading broker expects more outsized gains from this rocketing ASX All Ords stock. Let’s see why.

Read more »

Happy couple at Bank ATM machine.
Financial Shares

Forget CBA shares and check out this buy-rated ASX financial stock

One leading broker thinks that investors should be buying this growing company's shares.

Read more »

Man holding Australian dollar notes, symbolising dividends.
Financial Shares

This insurance company has more than doubled its final dividend on record results

This Kiwi insurer has more than doubled its final dividend on record profit results.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Financial Shares

Why is everyone talking about Qube shares?

The shares are in the green again today.

Read more »