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Axos Financial (AX)
NYSE:AX
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Axos Financial
(NYSE:AX)
72Outperform
Positive Factors
Financial Performance
AX's results topped Street estimates as both funding costs and operating expenses came in below expectations.
Loan Growth
The company's growth-focused culture, strong loan pipeline, and ongoing hiring of new teams should help loan growth accelerate moving forward.
Negative Factors
Credit Quality
Credit quality weakened incrementally as nonperforming loans increased $64 million to $177 million or 92 bp of loans.
Axos Financial (AX) vs. S&P 500 (SPY)
Market Cap
$3.44B
Dividend YieldN/A
Average Volume (3M)483.40K
Price to Earnings (P/E)8.1
Beta (1Y)1.45
Revenue Growth26.87%
EPS Growth10.56%
CountryUS
Employees1,781
SectorFinancial
Sector Strength78
IndustryBanks - Regional
Share Statistics
EPS (TTM)7.44
Shares Outstanding57,098,476
10 Day Avg. Volume569,031
30 Day Avg. Volume483,402
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)N/A
Price to Sales (P/S)3.05
Price to Cash Flow (P/CF)5.60
P/FCF Ratio3.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$86.00Price Target Upside42.83% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Axos Financial Business Overview & Revenue Model
Company DescriptionAxos Financial, Inc., together with its subsidiaries, provides consumer and business banking products in the United States. It operates through Banking Business and Securities Business segments. The company offers deposits products, including consumer and business checking, demand, savings, time deposit, money market, zero balance, and insured cash sweep accounts. It also provides single family, multifamily, and commercial mortgage loans; commercial real estate secured loans; commercial and industrial non-real estate, asset-backed, lines of credit, and term loans; automobile loans; fixed rate term unsecured loans; and other loans, such as structure settlements, small business administration consumer loans, and securities-backed loans. In addition, the company offers ACH origination, wire transfer, commercial check printing, business bill pay and account transfer; remote deposit capture, mobile deposit, lockbox, merchant, and online payment portal; concierge banking; mobile and text messaging banking; and payment services, as well as debit and credit cards, and digital wallets. Further, it provides disclosed clearing services; back-office services, such as record keeping, trade reporting, accounting, general back-office support, securities and margin lending, reorganization assistance, and custody of securities; and financing to brokerage customers. The company was formerly known as BofI Holding, Inc. and changed its name to Axos Financial, Inc. in September 2018. Axos Financial, Inc. was incorporated in 1999 and is based in Las Vegas, Nevada.
How the Company Makes MoneyAxos Financial generates revenue primarily through interest income from loans, mortgages, and securities, as well as from non-interest income sources such as fees and service charges. The company's key revenue streams include interest earned on loans and leases, interest on investment securities, and fees from banking and wealth management services. Axos Financial benefits from its digital-first approach, which reduces operational costs and enhances profitability. Additionally, the company engages in partnerships and strategic collaborations with fintech firms to expand its service offerings and reach new customer segments, further contributing to its revenue growth.
Axos Financial Financial Statement Overview
Summary
Axos Financial demonstrates robust financial health with strong revenue growth, high profitability margins, and efficient cash flow management. The company operates with no debt, enhancing its financial stability. However, there is room to improve the equity ratio to further strengthen its balance sheet.Income Statement
Axos Financial shows strong profitability with a high gross profit margin of 96.15% and a net profit margin of 25.10% for TTM. Revenue growth is robust at 62.68% from 2023 to 2024, and EBIT and EBITDA margins are healthy at 52.34% and 38.45%, respectively, indicating solid operational efficiency.85
Very Positive
Balance Sheet
The company maintains a strong equity position with a debt-to-equity ratio of zero, reflecting no debt in TTM. The ROE is impressive at 17.15%, indicating efficient use of equity. The equity ratio stands at 10.64%, which could be improved to enhance financial stability against liabilities.78
Positive
Cash Flow
Axos Financial exhibits strong cash flow management with a significant free cash flow growth rate of 40.53% from 2023 to 2024. The operating cash flow to net income ratio is 0.92, showing a solid conversion of earnings into cash. Free cash flow to net income ratio is 0.88, indicating efficient cash generation relative to profits.80
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.72B | 1.06B | 890.18M | 705.34M | 632.85M | 572.39M |
| Gross Profit | |||||
| 1.66B | 1.06B | 890.18M | 705.34M | 632.85M | 572.39M |
| EBIT | |||||
| 902.33M | 563.63M | 431.74M | 392.53M | 305.74M | 262.63M |
| EBITDA | |||||
| 662.73M | 662.57M | 455.13M | 375.45M | 340.46M | 297.62M |
| Net Income Common Stockholders | |||||
| 432.62M | 450.01M | 307.17M | 240.72M | 215.71M | 183.44M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.66B | 2.12B | 2.47B | 1.47B | 902.96M | 1.94B |
| Total Assets | |||||
| 9.98B | 22.86B | 20.35B | 17.46B | 14.27B | 13.85B |
| Total Debt | |||||
| 1.02B | 415.68M | 451.78M | 562.74M | 574.86M | 478.29M |
| Net Debt | |||||
| -468.16M | -1.56B | -1.78B | -639.84M | -140.77M | -1.28B |
| Total Liabilities | |||||
| 9.06B | 20.56B | 18.43B | 15.81B | 12.86B | 12.62B |
| Stockholders Equity | |||||
| 921.65M | 2.29B | 1.92B | 1.64B | 1.40B | 1.23B |
| Cash Flow | Free Cash Flow | ||||
| 378.89M | 269.52M | 157.74M | 184.51M | 402.14M | 254.30M |
| Operating Cash Flow | |||||
| 397.82M | 305.48M | 187.96M | 206.01M | 412.58M | 266.63M |
| Investing Cash Flow | |||||
| -1.09B | -2.59B | -2.39B | -2.77B | -866.77M | -1.33B |
| Financing Cash Flow | |||||
| 1.60B | 2.09B | 3.01B | 3.10B | -458.56M | 2.27B |
Axos Financial Technical Analysis
Negative
60.21
Price Trends
64.50
Negative
69.48
Negative
68.32
Negative
Market Momentum
-1.75
Negative
46.15
Neutral
62.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AX, the sentiment is Negative. The current price of 60.21 is below the 20-day moving average (MA) of 61.42, below the 50-day MA of 64.50, and below the 200-day MA of 68.32, indicating a bearish trend. The MACD of -1.75 indicates Negative momentum. The RSI at 46.15 is Neutral, neither overbought nor oversold. The STOCH value of 62.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AX.
Axos Financial Risk Analysis
Axos Financial disclosed 43 risk factors in its most recent earnings report. Axos Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Axos Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $3.44B | 8.09 | 18.81% | ― | 26.87% | 10.56% | |
69 Neutral | $3.64B | 16.59 | 14.14% | 1.65% | 2.59% | 7.66% | |
68 Neutral | $3.67B | 10.24 | 9.99% | 1.31% | 8.49% | 33.58% | |
66 Neutral | $3.27B | 11.02 | 7.34% | 5.34% | 29.04% | -9.28% | |
63 Neutral | $11.98B | 9.29 | 8.14% | 79.54% | 12.87% | -5.13% | |
61 Neutral | $3.43B | 42.73 | 4.23% | 9.24% | 14.25% | 10.46% | |
60 Neutral | $3.31B | 27.60 | 2.79% | 4.51% | 4.88% | -30.04% |
* Financial Sector Average
Performance Comparison
AX
Axos Financial
60.21
8.70
16.89%
ABCB
Ameris Bancorp
53.20
7.00
15.15%
ASB
Associated Banc-Corp
19.97
-0.23
-1.14%
BANF
BancFirst
109.54
19.84
22.12%
TFSL
TFS Financial
12.23
1.13
10.18%
AUB
Atlantic Union Bankshares
24.72
-7.68
-23.70%
Axos Financial Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: -16.84% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong growth in net interest income, loan originations, and deposits, alongside effective cost management, which were offset by a decline in net income and a significant increase in nonperforming assets. The net interest margin faced downward pressure, affecting overall performance.Highlights
Double-Digit Year-over-Year Growth in Key Metrics
Net interest income increased by 22.5% year-over-year to $280 million. Tangible book value per share grew by 21% year-over-year.
Strong Loan Origination and Asset Growth
Loan originations reached $3.5 billion with significant growth in single-family mortgage warehouse and C&I loan balances.
Effective Cost Management and Efficiency
Total non-interest expenses decreased by 1.5% from the prior quarter, with an efficiency ratio of 41% for the banking segment.
Positive Deposit Growth
Total on-balance sheet deposits increased by 9.5% year-over-year to $19.9 billion, with a 10.6% increase in demand, money market, and savings accounts.
Lowlights
Decline in Net Income
Net income was approximately $104 million for the quarter, down from $152.8 million in the same period a year ago.
Increase in Nonperforming Assets
Nonperforming assets increased significantly, with notable increments in single-family jumbo mortgages ($10.4 million), multifamily mortgage book ($17.8 million), and commercial real estate loan book ($20 million).
Pressure on Net Interest Margin
Net interest margin decreased to 4.83% from 5.17% in the previous quarter, partly due to the payoff of FDIC-acquired loans.
Company Guidance
In the second quarter of fiscal 2025, Axos Financial demonstrated strong financial performance with a notable 22.5% year-over-year increase in net interest income, reaching $280 million. The company achieved a return on average common equity of 17% and a return on assets of 1.7%, contributing to a 21% growth in tangible book value per share. Loan balances saw a year-over-year increase of 6.7% to $19.5 billion, while total on-balance sheet deposits rose by 9.5% to $19.9 billion. The net interest margin for the quarter was 4.83%, showing an improvement from the previous year, although slightly down from the first quarter of 2025 due to the impact of early loan payoffs. Axos also managed to reduce its non-interest expenses by 1.5% compared to the previous quarter, maintaining an efficiency ratio of 41% in its banking segment. Despite a decrease in net income year-over-year, adjusted net income and EPS remained robust at $92.5 million and $1.60 per share, respectively. The company highlighted strong loan originations and improvements in its loan pipeline, particularly in single-family and multifamily mortgage segments, amidst a competitive landscape.Axos Financial Corporate Events
Business Operations and StrategyFinancial Disclosures
Axos Financial Highlights Strong Performance and Growth Prospects
Positive
Jan 29, 2025
On January 29, 2025, Axos Financial announced its latest investor presentation highlighting its ability to maintain strong financial performance and growth potential. The company reported improvements in various financial metrics such as return on equity and net interest income, outperforming many of its peers. Axos also emphasized its diversified asset and deposit base, which reduces risk and offers multiple growth opportunities. The company’s strategic efforts are aimed at sustaining long-term growth through technology integration, lower client acquisition costs, and a strong focus on credit risk management. This positioning suggests a positive outlook for stakeholders, given the ongoing efforts in expanding its market presence and optimizing operations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.