The Hub24 Ltd (ASX: HUB) share price is under the spotlight after the ASX fintech share announced its March 2023 quarter update.
Hub24 offers platforms for advisers and their clients that help with a range of investment options, with enhanced transaction and reporting functionality.
Hub24’s March 2023 quarter growth
Hub24 revealed that its total funds under administration (FUA) reached $76.9 billion as at 31 March 2023. This comprised a 16.5% year on year increase of platform FUA to $59.4 billion and a 1% year on year increase of portfolio, administration and reporting services (PARS) to $17.5 billion.
The ASX fintech share revealed that for the quarter, platform FUA rose 6.5%, with platform net inflows of $1.9 billion. The inflows were 28.6% lower than the prior corresponding period. It benefited from positive market movements amount to $1.7 billion.
Hub24 said that it was ranked first place, compared to peers, for both quarterly an annual net inflows, according to the latest ‘plan for life’ data. Its market share is now 5.85% as at 31 December 2022, up from 4.9% in December. The company said it continues to have the fastest growth rate as a percentage of FUA based on annual net inflows.
It also revealed that the number of accounts across Class Super, Class Portfolio and Class Trust rose by 2% year on year to 200,247.
Growth of its key areas is helpful for pushing the Hub24 share price higher over time, though the market does expect a certain amount of growth in the shorter-term.
Further growth expected
Management revealed that its pipeline of opportunities has “continued to grow” during the quarter in line with its historical trend, with 27 new distribution agreements signed and the total number of advisers using the platform increasing to 3,748 (up 9.2% year on year).
On top of that, Hub24 noted that it had entered into a ‘heads of agreement’ with EQT Holdings Ltd (ASX: EQT) to provide custodial platform administration and technology solutions for EQT and AET trustee services clients. The scope of this agreement covers approximately $4 billion of FUA. Despite that, the current platform FUA target, excluding PARS FUM, guidance of $80 billion to $89 billion at FY24 remains “unchanged”.
Final thoughts on the Hub24 share price
The business continues to see growth in multiple ways and it’s now benefiting from stronger interest rates because it’s earning more interest.
It still trades on a high valuation for its earnings, I wouldn’t call it a great buy today – other ASX shares could deliver more growth at a lower valuation. However, its trajectory is impressive and one day it could be the largest player if it keeps growing faster than the competition.
But, there are other ASX growth shares that I’d rather buy first.
