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Hub24 (ASX:HUB) share price drops on Dec update

The Hub24 Ltd (ASX: HUB) share price has fallen more than 2% after investors saw the December quarter update.

Hub24 operates a number of platforms, including HUB24, Xplore Wealth and Class.

December 2023 quarter update

These numbers are for the three months to 31 December 2023.

Hub24 reported record platform net inflows of $4.5 billion (up 60.4% year over year), including $1.8 billion from a large client transition.

However, excluding the large transition, platform net inflows were $2.7 billion, which was down 4% year over year.

Platform net inflows for the first half of FY24 were $7.2 billion, which was an increase of 25.9% year over year. Average monthly net inflows for the FY24 first half was $912 million, up 15.6% year over year.

Hub24 revealed that its total funds under administration (FUA) was $91.2 billion at 31 December 2023, which was up 25% year over year. Platform FUA rose 29.8% to $72.4 billion. Those are good growth numbers for the Hub24 share price.

In the latest ‘plan for life’ data, Hub24 reportedly ranked first for its quarterly and annual net inflows. Hub24’s market share has increased to 6.7%, up from 5.7% at 30 September 2022. It’s ranked in 7th place overall and still has the fastest growth rate as a percentage of FUA based on annual net inflows.

The 2023 SMSF adviser awards resulted in Hub24 winning the SMSF advice platform of the year and Class Super winning SMSF software platform of the year.

Final thoughts on the Hub24 share price

The company said it remains on track to meet its platform FUA target range of between $92 billion to $100 billion for FY25.

The EQT Holdings Ltd (ASX: EQT) transition of approximately $4 billion of FUA “continues to progress”, with a bulk transition of between $2.5 billion to $3.75 billion expected in the second half of FY24 and the balance in FY25.

Hub24 has done well for long-term shareholders, but the current Hub24 share price certainly reflects the nature of its growth and recurring revenue. It’s valued highly, and that makes me cautious.

I’m not sure how much more it is going to grow at the rate it is, so it’s difficult to say what a good price is for the Hub24 share price. I’m happy to watch from the sidelines.

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