In key news on Australian stocks, Netwealth Group Limited (AU:NWL) shares dropped by 5% on Thursday despite reporting solid results for the March quarter. The company posted a 28.5% year-over-year increase in its FUA (funds under administration), reaching AU$84.7 billion as of March 31. Shares fell as the company reported a lower “average revenue bps [basis points]” in the quarter due to the structure of its tiered administration fees and lower cash percentage.
As of March 31, 2024, the company’s cash transaction account balance represented 5.7% of FUA custodial, below the average of 6.4% in the first half of FY24.
Netwealth is a financial services company offering a range of products, including superannuation products, advisory solutions, investment solutions, and more.
Netwealth’s Record FUA Performance
For the March quarter of FY24, Netwealth reported FUA inflows of AU$5.2 billion, marking a 40.7% increase compared to a year ago. Additionally, the FUA net inflows came at AU$2.7 billion, marking a 62.2% increase compared to the previous corresponding period (PCP). The 12-month FUA inflow was a record AU$21.2 billion.
The company also experienced a remarkable surge in new accounts, highlighting strong market momentum. The company added 5,132 new accounts in the March quarter, showing an increase of 11.6% compared to the same quarter last year.
In terms of outlook, Netwealth is positive and expects strong FUA inflow activity in the June quarter. This optimism is based on upcoming large transitions as well as higher seasonal flows and improved market activity.
What is the Share Price Forecast for Netwealth?
According to TipRanks’ rating consensus, NWL stock has a Hold rating, backed by nine recommendations. The Netwealth share price forecast is AU$17.69, indicating a downside of 8.10% on the share price.
Year-to-date, the stock has gained 24%.
