The HUB24 Ltd (ASX: HUB) share price climbed higher this morning, ahead of the company’s annual general meeting (AGM) today.
What is moving the HUB24 share price?
The HUB24 share price rose in early trade after the company released Chairman Bruce Higgins’ shareholder address. Mr. Higgins focused on a successful year, headlined by a 15% jump in revenue to $96 million.
Platform revenue rocketed 36% higher in FY2019 while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 30% to $14.8 million. Funds under administration (FUM) surged 54% on the prior corresponding period (pcp) to $12.9 billion as HUB24’s growth continues. Profitability remained high for HUB24 with underlying EBITDA margin increasing by 330 basis points to 33.3%.
What about the company’s growth prospects?
Mr. Higgins noted the company has maintained its position as “the fastest growing platform in the market in percentage terms”. HUB24’s compound annual growth rate (CAGR) in platform revenue over the past 5 years totals an impressive 76%.
The company has delivered record growth in Q1 2020 after posting net inflows of $1.2 billion to FUA, which represents a 94% increase on Q4 2020.
HUB24 currently has 256 active licensees and signed an impressive 84 new agreements in FY19 with 1,625 advisers, up 32% on pcp. Mr. Higgins cited the company’s 57% of industry annual net inflows which is “a run rate of ~40 times our underlying market share of 1.45%”.
This growth hasn’t been reflected in the HUB24 share price, which has climbed a just 9% higher in 2019. That represents significant underperformance against the S&P/ASX 200 Index (INDEXASX: XJO) which has returned 21.59% this year.
Is the HUB24 share price good value?
The HUB24 share price is trading in the middle of its 52-week range with a market cap of $795 million. The company is trading at a whopping 112x earnings but that is perhaps not the best statistic on which to judge the ASX growth stock.
The company is currently yielding 0.28% per annum but again, that is fairly standard for a company reinvesting in its significant growth potential. The HUB24 share price has climbed higher in 2019, while competitor Praemium Ltd (ASX: PPS) remains in the red.
The HUB24 share price has climbed higher as shareholders remain positive on its growth prospects. It will be worth watching the company’s shares throughout the day to gauge shareholders’ reactions to its AGM.
The post HUB24 share price climbs higher ahead of AGM appeared first on Motley Fool Australia.
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Kenneth Hall 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 and Praemium Limited. The Motley Fool Australia has recommended Hub24 Ltd and Praemium Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019