Hub24 (ASX:HUB) Surges 8% on Record A$10.7B Inflows: Buy the Breakout or Take Profits?

Hub24 posts record inflows, but valuation looks stretched

Hub24 (ASX: HUB) jumped 8 per cent on Tuesday after smashing quarterly records once again. The wealth platform pulled in A$5.6 billion in net inflows for the December quarter, pushing first-half inflows to a record A$10.7 billion. Total funds under administration now sit at A$152.3 billion, up 26 per cent from a year ago. These are genuinely impressive numbers. But with the stock up more than 80 per cent over the past year and trading on a PE ratio above 117x, the big question is simple: is there still money to be made here, or has the easy ride already happened?

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Hub24 Keeps Winning the Platform Wars

Here’s what Hub24 actually does. It runs a technology platform that sits between financial advisers and their clients’ money. Think of it as the plumbing that makes investing work, handling everything from superannuation accounts to portfolio reporting.

What makes these results stand out is not just growth but market share gains. Hub24 now controls 9.3 per cent of the Australian platform market, up from 7.9 per cent a year ago. That might sound small, but in this industry, every percentage point represents billions of dollars. The company ranked first for net inflows for the eighth quarter in a row, meaning it is not just growing; it is actively taking clients from bigger, older competitors.

During the quarter, Hub24 signed 34 new distribution agreements with advice firms. This matters because once advisers plug into a platform, they rarely switch. The hassle of moving client accounts creates stickiness that can last for years. In our view, this growing adviser network is the real engine behind Hub24’s success, and it shows no signs of slowing down.

Strong Growth, But the Price Tag is Getting Heavy

The operational story is excellent. Platform funds grew 29 per cent to A$127.9 billion. The company now has 5,277 advisers on its books, up 8 per cent from last year. Revenue is growing, margins are healthy, and management keeps executing.

But here is the catch. Hub24 trades on a trailing PE ratio of around 117x. To put that simply, investors are paying A$117 for every A$1 of earnings the company made last year. Compare that to rival Netwealth Group (ASX: NWL) at roughly 58x, and Hub24 looks twice as expensive.

We believe Hub24 deserves a premium for its superior growth. But at these levels, the stock needs everything to go right for years to justify today’s price. If inflow growth slows even slightly, or if fee competition heats up, the share price could take a hit.

The Investor’s Takeaway for Hub24

The bull case is straightforward. Hub24 is winning share in a growing market, advisers keep signing up, and the company is investing in new products like AI tools and retirement solutions.

The bear case is equally simple. At 117x earnings, you are paying for perfection, and perfection rarely happens.

Our view? Hub24 is a quality business with real competitive advantages. If you already own shares, these results give you no reason to sell. But if you are looking to buy, we would suggest patience. Waiting for a pullback would give you a better entry point into what remains one of the best growth stories on the ASX.