Hub24: Growth Efforts Are Sensible but Unlikely to Build a Moat

We retain our fair value estimate for no-moat Hub24 at AUD 24.50 per share, with shares screening as overvalued. The firm’s growth initiatives, as outlined during its 2023 investor day, appear replicable. Meanwhile, resurging competition and regulatory constraints will likely limit pricing power and prevent any platform provider from building maintainable switching costs. We expect fee compression and continued growth investments to be the industry norm, limiting Hub24’s ability to expand margins. While we think Hub24 will still receive net inflows over the next five years, its market share gains are likely to slow.