Why Are Hub24 Shares Down This Week?

Hub24 shares (ASX: HUB) are having a difficult week in the markets. down 12.19%, despite delivering record full-year earnings. Markets appear to be more focused on emerging flow headwinds, with the broader financials sector also providing an overhang.

The Hub24 share price heads into the final trading session of the week at A$76.48, down 20.15% YTD, with 15.58% of that coming in the past two weeks. The ASX 200 Financials (XFJ) have fallen 9.3% over the same period, although the YTD 1.56% decline has offered more resistance.

Financials Come In Strong

Hub24’s FY26 result showcased impressive growth across virtually every key metric. Total revenue climbed 23% to A$501.1 million, while group underlying EBITDA surged 30% to A$211.4 million, demonstrating meaningful operating leverage as the business scales. Statutory net profit after tax jumped 51% to A$120.2 million, with underlying NPAT up 40% to A$137.3 million, reflecting both strong revenue growth and margin expansion.

The company’s core platform business delivered particularly robust performance. Platform revenue increased 26% to A$406.9 million, underpinned by total Funds Under Administration reaching A$164.3 billion, up 20% year-on-year. Platform FUA specifically hit A$139.5 billion, while the PARS (separately managed account) book contributed A$24.8 billion.

Annual platform net inflows reached A$18.9 billion, representing 20% growth when excluding prior-year large institutional migrations that had temporarily inflated the comparative period.

Management declared a final fully franked dividend of 42.0 cents per share, bringing total FY26 dividends to 78.0 cents, a 39% increase on the prior year.

Outflow Concerns

The relative weakness for the stock can be attributed to management’s results presentation and analyst briefing, where executives acknowledged an uptick in outflows from the discretionary Investor Directed Portfolio Service segment. While overall platform flows remained healthy and superannuation inflows showed strength in early FY27 trading, the IDPS commentary introduced a credible near-term risk to the growth narrative that markets had been pricing.

The discretionary wealth segment is inherently more sensitive to macroeconomic headwinds, including cost-of-living pressures, interest rate settings, and broader market sentiment. Markets interpreted the IDPS weakness as a potential structural shift rather than a temporary blip, raising questions about whether Hub24’s high net inflow growth rate can be sustained as the business scales from a larger base. With unemployment numbers also coming in higher than expected on the day, the pressure on consumer discretionary parts of the market faced further pressure.

For a stock trading on a premium multiple as a structural growth compounder, any suggestion of slowing momentum in a material business segment typically triggers a swift reaction.

Future Targets

Looking ahead, Hub24 outlined medium-term growth ambitions that underscore management’s confidence in the structural tailwinds supporting the wealth platform sector. The company has set a target for platform FUA of A$186-200 billion by FY28, excluding PARS FUA, implying continued strong growth from the current A$139.5 billion platform base.

Management cited several supportive industry trends, including Australia’s compulsory superannuation system, rising demand for professional financial advice as the population ages, and ongoing platform consolidation as advisers seek scale and technology advantages. Hub24 expects to further increase funds under administration per adviser and extend its market leadership position through continued product innovation and growing adviser adoption.

The company plans to pilot its myhub ecosystem during the first half of FY27, representing the next evolution of its open architecture wealth technology platform. The ecosystem integrates the Hub24 platform with Class, myprosperity, and third-party services to improve adviser productivity and enhance client outcomes. However, management commentary during the results presentation indicated that myhub would add revenue over time rather than materially changing near-term financial performance, tempering expectations that the strategic initiative could offset concerns about current flow dynamics.

Zooming out to the five year chart puts a completely different perspective on the stock. Whilst the recent pullback has left near term holders slightly perturbed, the five year gain of 197% stands up very well against the broader XFJ, up 38.4% on the same period. Near term underperformance set against longer term outperformance, suggests both sides of the aisle remain in play as FY27 progresses.