Why ‘we’re quite bullish’ on this battered ASX 200 growth share: fundie

It’s been a rough year so far the share price of S&P/ASX 200 Index (ASX: XJO) growth stock Hub24 Ltd (ASX: HUB).

The tech stock has dumped 24% since the start of 2022 to trade at $22.26 today.

That leaves it having underperformed its sector – the S&P/ASX 200 Financials Index (ASX: XIJ) – by around 15%. The sector has dumped 9% this year while the ASX 200 has slumped 11%.

But experts at Wilson Asset Management expect big things from the financial services company. The stock is held by the investment manager’s listed investment companies, WAM Capital Limited (ASX: WAM) and WAM Active Limited (ASX: WAA).

Here’s why one fundie is “quite bullish” on the Hub24 share price.

Is now the time to buy this ASX 200 growth share?

The Hub24 share price could be set to take off after underperforming the ASX 200 over the course of this year so far.

The company provides platform services to entities working in the financial sector. And equity analyst Sam Koch thinks it’s among the best of its bunch, naming it a high conviction stock pick. Koch says:

Hub have made a number of strategic acquisitions over the last couple of years that have really enhanced their platform capability, especially relative to its peers.

We believe that this enhancement will drive an acceleration [in] organic growth for the business and we’re quite bullish on that medium term.

The most recent of such acquisitions was, of course, its takeover of formerly ASX-listed Class.

Hub24 ultimately paid 12.5 cents cash and 1 Hub24 share for every 11 Class shares for the cloud-based wealth accounting technology provider.

The Hub24 share price launched to a record high of $34.72 when it announced the takeover in October. It has since tumbled 35%.

The ASX 200 share also snapped up its formerly ASX-listed peer Xplore Wealth and Ord Minnett’s non-custody Portfolio Administration and Reporting Service, as well as a significant stake in Diverger Ltd (ASX: DVR) (previously known as Easton Investments), in 2020.  

Hub24 share price snapshot

The Hub24 share price has had a rough trot recently. Looking longer term, however, the ASX 200 share has been a strong performer.

The stock has fallen 24% over the past 12 months but it has gained 300% over the last five years.

For comparison, the ASX 200 has fallen 7% since this time last year but has lifted 18% over the last five years.

The post Why ‘we’re quite bullish’ on this battered ASX 200 growth share: fundie appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are 3 ASX 200 shares going ex-dividend on Monday
• Hub24 share price slumps despite dividend doubling on record growth

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has positions in and has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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