At $8.7B Market Cap, Is Hub24 Still a Buy – Or Time to Take Profits?

Hub24 (ASX: HUB) has delivered one of the standout performances on the ASX in 2025, surging 52% year-to-date to reach an $8.7 billion market capitalisation. For investors who’ve ridden this rally, the question now isn’t whether Hub24 has a strong business; it clearly does. The question is whether the stock’s valuation has outpaced even the most optimistic growth assumptions.

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Platform Dominance Drives Market Share Gains

Hub24’s momentum reflects genuine operational strength. The company increased its platform market share to 9% in June 2025, up from 7.6% a year earlier, marking the largest market share gains of any platform provider in Australia. This pushed Hub24 into sixth place among platform providers by funds under administration, climbing one spot from the previous quarter.
What makes this significant is the competitive context. Hub24 achieved these gains while competing against well-resourced institutional rivals like AMP, Colonial First State, and BT Panorama. The company consistently ranks first for adviser satisfaction and platform functionality, suggesting it’s winning on merit rather than benefiting from industry disruption alone.

The company delivered record quarterly net inflows of $5.2 billion in Q1 FY26, up 28% on the prior year. This reveals Hub24 isn’t just riding market growth; it’s actively taking share. With 5,229 active advisers now using the platform, Hub24 has built a distribution network covering approximately one-third of Australia’s financial advisers. We believe this network effect creates a powerful moat that becomes self-reinforcing as more advisers attract more clients.

The Valuation Question: Pricing Perfection

Here’s where the investment case becomes complicated. Hub24 currently trades at a price-to-earnings ratio of 110x, more than five times the ASX 200 average. The market is valuing Hub24 as if it will maintain exceptional growth for years without meaningful competitive pressure, an optimistic assumption that leaves no room for disappointment.
Morningstar recently raised its fair value estimate to $40 per share, yet the stock trades at roughly 2.7 times what analysts consider reasonable. To justify current prices, investors would need to assume a cost of capital around 3.5%, essentially pricing in almost zero risk. This matters because even small changes in growth assumptions or competitive dynamics could trigger significant valuation compression.
Several brokers have responded by downgrading ratings. UBS moved from Buy to Neutral with a $112 target, while Macquarie maintains neutral at $95.90. The key concern here is that Netwealth, Hub24’s closest rival, is developing in-house technology systems, potentially narrowing what was previously Hub24’s competitive advantage.

The Investor’s Takeaway

The bull case remains structurally sound. Australia’s platform market is growing 10-12% annually, and Hub24’s recurring revenue model provides excellent leverage as the business scales. We believe the company’s execution capability is exceptional.
However, at 110x earnings, the stock is pricing in near-perfect execution with no margin for error. For growth investors who bought below $80, the 52% gain represents a sensible profit-taking opportunity. For new investors, waiting for a pullback towards $70-80, where broker targets cluster, would offer better risk-reward. The business quality deserves a premium, but not a 110x premium.