Hub24: Strong Flows but Upside More Than Fully Priced In

No-moat Hub24's fund flow performance in the first three months of fiscal 2025 noticeably exceeded our expectations. But we still attribute much of this to a cyclical rebound in flows following previously depressed capital markets. While Hub24 is likely to continue gaining share in the platform market, we expect these gains to slow due to competitive pressures. At current prices, we believe the shares are materially overvalued. Despite forecasting EPS growth to average 20% per year over the next five years, the current forward P/E multiple of nearly 60 times appears excessive.