Why the Hub24 (ASX:HUB) share price could go higher

The Hub24 Ltd (ASX: HUB) share price has almost doubled this year. But this broker thinks it could go higher. Here's the lowdown…

| More on:

Should you invest $1,000 in Orora right now?

Before you buy Orora shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Orora wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

man jumping from 2020 cliff to 2021 cliff representing asx outlook 2021

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

Hub24 Ltd (ASX: HUB) is one of few ASX shares to not only break above its pre-COVID highs, but almost double in year-to-date returns. The investment and superannuation portfolio administrator has experienced significant growth in its platform revenue and funds under administration (FUA) over the past five years.

But, despite the Hub24 share price currently sitting at over $20, according to one broker, the company still has a significant market share opportunity at hand. Here's the Hub24 growth story so far and why this broker thinks the company still has a solid runway ahead of it. 

Hub24 highlights 

Hub24's investment and superannuation platform offers a comprehensive range of investment options, with enhanced transaction and reporting solutions, for all types of investors, individuals, companies, trusts, associations or self-managed super funds. 

The platform has continued to scale with a 5-year compound annual growth rate (CAGR) for FUA of 59% and a 5-year CAGR for platform revenue of 55%. More recently, in FY20, the company achieved a 37% increase in platform revenue to $74.3 million and a 34% increase in FUA to $17.2 billion whilst underlying net profit after tax (NPAT) soared 49% to $10.1 million. 

The company made a series of compelling acquisitions in FY20 to strengthen its position as a leading platform provider. Three companies including Xplore Wealth Ltd (ASX: XPL), PARS and an investment of up to 40% of Easton Investments Ltd (ASX: EAS) were added under the Hub24 brand for a total consideration of $93 million. These acquisitions are expected to result in approximately 13% earnings per share (EPS) accretion in FY22 and expected synergies of $10 million per annum by FY24. 

Despite the company's record growth, acquisitions and achievements to date, according to Citi, the market share opportunity for Hub24 is still significant. In FY20, the company's market share increased from 1.5% to 2.1%. 

IOOF agreement 

Last Friday, Hub24 announced it had entered into a binding heads of agreement with IOOF Holdings Limited (ASX: IFL) to collaborate on developing a range of solutions. These include an investment and superannuation wrap platform, utilising HUB24's custody, administration and technology capabilities, as well as a suite of managed portfolios. 

Under this proposed arrangement, Hub24 will provide custody and administration services for IOOF's new private label investment and superannuation solution that will extend the range of products and services offered to the IOOF adviser network and its clients. This is expected to be launched by the second quarter of calendar year 2021.

Citi bullish on Hub24 share price 

On Monday, Citi retained its Hub24 share price target of $24.00 as well as its buy rating. The broker believes the company is well placed to take advantage of the ongoing structural shifts in the wealth management sector. It also sees the agreement with IOOF as a positive which will allow the business to build additional volume and scale. 

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX shares returned to positive territory this Tuesday.

Read more »

Multiple percentage signs in the palm of a man's hand.
Share Market News

ASX 200 lifts on the RBA's latest interest rate call

The ASX 200 is up 0.5% on the heels of the RBA’s interest rate announcement.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Broker Notes

Macquarie tips 40% upside for this ASX 200 real estate stock

Let's see what the broker is saying about this stock.

Read more »

Woman sits at her desk working at night, while traffic flows on a busy freeway out the window behind her.
Broker Notes

Transurban shares: Buy, hold, sell? Here's Macquarie's recommendation

Macquarie’s analysts just ran their slide rules over Transurban shares. Here’s what they found.

Read more »

A woman sits at her home computer with baby on her lap, and the winning ticket in her hand.
Consumer Staples & Discretionary Shares

Which 'enduring high-quality business' has become a forgotten ASX 200 stock?

Fundie says this ASX 200 consumer discretionary stock has been flying under investors' radar.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

Want a financial stock outside the big 4 banks? Macquarie tips 15% upside for this small cap financial

For those searching on the edges, this name could be worth a second look according to Macquarie.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Kogan, Monash IVF, OFX, and ResMed shares are falling today

Why are these shares taking a tumble today? Let's find out.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why Breville, Clarity, EOS, and TechnologyOne shares are racing higher today

These shares are having a strong session on Tuesday. But why?

Read more »