The Aristocrat Leisure Limited (ASX:ALL) share price is up 44.1% since the start of 2024. Meanwhile, the Hub24 Ltd (ASX:HUB) share price is 1.4% away from its 52-week high.
ALL share price in focus
Founded by Len Ainsworth in 1953, Aristocrat Leisure is an Australian gambling machine operator that is headquartered in Sydney.
Aristocrat is currently the largest gambling machine manufacturer in Australia and one of the largest manufacturers of slot machines around the world. However, that’s just one part of the business. Aristocrat also makes online games. This segment has grown steadily to make up nearly half its total revenue.
Gaming machines can be sold outright to a venue or gaming operator. Alternatively, a machine can be installed with a proportion of the revenue generated being paid on a recurring basis back to Aristocrat.
While it may be large, Aristocrat Leisure Limited is a growth stock, and so it requires a different set of rules and may not be simple to value at times. Studies have shown that over 5-10+ years, it’s top-line revenue growth which explains a stock’s performance. That’s why it’s good to see Aristocrat Leisure Limited is able to grow revenue at 11.0%, a good clip.
HUB shares
HUB24 was founded in 2007 and has quickly become a leading player in the wealth management industry, providing software and management platforms that touch financial advice, superannuation, and investment management.
HUB24’s three main products are the platforms HUB24, Class, and myprosperity. HUB24 is made for financial advisers and their clients, providing access to a range of managed funds and investment products. Class is a leading software for self-managed super funds to manage portfolios, legal documentation, and compliance. myprosperity is a provider of client portals for accountants and advisers to provide an enhanced service and customer experience.
HUB24’s competitive advantage is in the quality of its service. In 2024 they’ve been awarded Overall Best Platform in the Adviser Ratings Financial Advice Landscape Report, and ranked first for Overall Satisfaction and Brand Image and Reputation in the 2024 Wealth Insights Platform Service Level Report.
ALL share price valuation
As a growth company, some of the trends we would be looking for from ALL include revenue growth, profit growth, and return on equity (ROE). Since 2021, ALL has grown revenue at a rate of 11.0% per year to reach $6,485m in FY24. Over the same time period, net profit has increased from $1,378m to $1,512m. ALL last reported a ROE of 22.8%.
Over the last 3 years, HUB has increased revenue at a rate of 44.4% per year to hit $328m in FY24. Meanwhile, net profit has risen from $10m to $47m. HUB’s last reported ROE was 9.2%.
Please keep in mind that context is important – these metrics give us some indication of company performance, but we need a lot more info to work out the value of ALL or HUB shares. To learn more about valuation, I’d recommend signing up for one of our free online investing courses.
