Axos Financial (NYSE:AX) Announces Quarterly Earnings Results

Axos Financial (NYSE:AX) issued its quarterly earnings results on Thursday. The company reported $2.53 EPS for the quarter, topping analysts’ consensus estimates of $2.16 by $0.37, FiscalAI reports. The business had revenue of $379.77 million during the quarter, compared to analysts’ expectations of $375.54 million. Axos Financial had a return on equity of 16.48% and a net margin of 22.53%.During the same quarter in the prior year, the business posted $1.94 earnings per share.

Here are the key takeaways from Axos Financial’s conference call:

• Strong growth and profitability: Net income rose 12.9% year over year to $124.9 million, while diluted EPS increased 12.5% to $2.16; excluding a $21 million legal accrual, EPS would have risen 28% to $2.46.
• Loan and deposit momentum remains robust: Net loans excluding single-family mortgage warehouse grew by approximately $750 million sequentially, deposits increased 17.9% year over year to $24.6 billion, and management expects low-to-mid-teens organic loan growth over the next year.
• Credit trends improved: Non-performing assets declined to $159 million, net charge-offs fell to 25 basis points, and the allowance for credit losses remained strong at 1.34% of loans, with management expecting reserves of roughly 1.3%-1.4% going forward.
• Margin expected to remain stable, but acquisition-related liquidity may weigh on reported NIM: Management forecast relatively stable net interest margin and deposit costs, while noting that excess deposits from the Capital One acquisition could temporarily sit in cash and reduce reported NIM without affecting net interest income.
• Legal accrual increased expenses: A $21 million accrual related to a legal matter in the clearing business lifted quarterly non-interest expense to $205.9 million and reduced reported fiscal-year pretax income, though management characterized the item as non-recurring.

Axos Financial Price Performance

AX traded up $0.67 on Friday, hitting $99.14. 135,535 shares of the company’s stock traded hands, compared to its average volume of 398,801. The company’s 50 day simple moving average is $93.10 and its 200-day simple moving average is $91.79. The firm has a market cap of $5.64 billion, a price-to-earnings ratio of 12.03 and a beta of 1.23. Axos Financial has a one year low of $74.89 and a one year high of $105.20. The company has a current ratio of 1.15, a quick ratio of 1.15 and a debt-to-equity ratio of 0.38.

Key Axos Financial News

Here are the key news stories impacting Axos Financial this week:

• Positive Sentiment: Quarterly earnings beat expectations: Axos reported adjusted earnings of $2.53 per share, above the $2.15–$2.16 analyst consensus and up from $1.94 a year earlier. Revenue of $379.77 million also exceeded the $375.54 million estimate. The company reported a 16.48% return on equity and a 22.53% net margin. Axos Financial Beats Q4 Earnings and Revenue Estimates
• Positive Sentiment: Analysts raised their valuation targets: Needham increased its target from $110 to $128 and maintained a “buy” rating, implying significant upside from recent trading levels. Keefe, Bruyette & Woods raised its target from $105 to $110 while retaining a “market perform” rating, signaling a more cautious but still improved outlook. Needham Raises Axos Financial Price Target
• Positive Sentiment: Growth outlook remains favorable: Management expects low- to mid-teens loan growth and stable net interest margins, suggesting continued balance-sheet expansion and relatively resilient core banking profitability. Axos Forecasts Loan Growth and Stable Net Interest Margin
• Negative Sentiment: Arc integration will raise expenses: The integration is expected to add approximately $1 million per month in costs, which could temporarily weigh on margins and partially offset the benefit of loan growth.

Insider Activity at Axos Financial

In other Axos Financial news, EVP Michael James Watson sold 1,653 shares of the company’s stock in a transaction that occurred on Tuesday, May 19th. The stock was sold at an average price of $83.77, for a total value of $138,471.81. Following the completion of the transaction, the executive vice president directly owned 4,592 shares in the company, valued at $384,671.84. This represents a 26.47% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Also, Director Roque A. Santi sold 500 shares of the stock in a transaction that occurred on Friday, May 8th. The shares were sold at an average price of $87.77, for a total transaction of $43,885.00. Following the sale, the director directly owned 7,646 shares of the company’s stock, valued at approximately $671,089.42. This trade represents a 6.14% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Corporate insiders own 4.85% of the company’s stock.

Hedge Funds Weigh In On Axos Financial

Several institutional investors have recently bought and sold shares of AX. Brown Brothers Harriman & Co. bought a new position in shares of Axos Financial during the 3rd quarter valued at about $29,000. Transamerica Financial Advisors LLC increased its holdings in shares of Axos Financial by 163.7% in the fourth quarter. Transamerica Financial Advisors LLC now owns 443 shares of the company’s stock worth $38,000 after purchasing an additional 275 shares during the last quarter. EverSource Wealth Advisors LLC lifted its position in shares of Axos Financial by 294.7% in the second quarter. EverSource Wealth Advisors LLC now owns 446 shares of the company’s stock worth $34,000 after buying an additional 333 shares in the last quarter. NewEdge Advisors LLC lifted its position in shares of Axos Financial by 22.8% in the fourth quarter. NewEdge Advisors LLC now owns 1,105 shares of the company’s stock worth $95,000 after buying an additional 205 shares in the last quarter. Finally, Advisory Services Network LLC bought a new position in Axos Financial during the third quarter valued at approximately $104,000. 83.79% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

A number of research analysts have recently weighed in on the company. Weiss Ratings raised Axos Financial from a “buy (b-)” rating to a “buy (b)” rating in a research report on Wednesday, July 1st. Keefe, Bruyette & Woods raised their target price on shares of Axos Financial from $105.00 to $110.00 and gave the stock a “market perform” rating in a research note on Friday. Zacks Research downgraded shares of Axos Financial from a “strong-buy” rating to a “hold” rating in a report on Wednesday, April 8th. Benchmark began coverage on shares of Axos Financial in a research report on Wednesday, July 8th. They issued a “buy” rating and a $115.00 price target for the company. Finally, Raymond James Financial raised shares of Axos Financial from an “outperform” rating to a “strong-buy” rating and reduced their price objective for the stock from $110.00 to $100.00 in a research note on Tuesday, April 7th. Two research analysts have rated the stock with a Strong Buy rating, four have given a Buy rating and two have assigned a Hold rating to the company. According to data from MarketBeat, the company currently has a consensus rating of “Buy” and a consensus target price of $113.33.

About Axos Financial

Axos Financial, Inc (NYSE: AX) is a diversified online banking and financial services holding company headquartered in San Diego, California. The firm traces its origins to 1999 with the launch of Bank of Internet USA and rebranded as Axos Financial in December 2018 to reflect an expanded suite of digital offerings. Axos Financial operates through its wholly owned subsidiary, Axos Bank, providing a technology-driven banking platform that serves both retail and commercial clients across the United States.

Through its digital banking platform, Axos Financial delivers a range of deposit products, including checking and savings accounts, money market and certificate of deposit accounts, as well as individual retirement accounts.