Back in December 2023, I wrote an article about Axos Financial (NYSE: AX ). At the time, the firm was making some interesting changes at the management level and was also making operational changes that included the acquisition of twoCrude Value Insights offers you an investing service and community focused on oil and natural gas. We focus on cash flow and the companies that generate it, leading to value and growth prospects with real potential.Subscribers get to use a 50+ stock model account, in-depth cash ...

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分组1 - Axos Financial reported quarterly earnings of $1.94 per share, exceeding the Zacks Consensus Estimate of $1.82 per share, and showing an increase from $1.83 per share a year ago, resulting in an earnings surprise of +6.59% [1] - The company achieved revenues of $321.45 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.52%, and up from $290.92 million year-over-year [2] - Axos Financial has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] 分组2 - The stock has gained approximately 22.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.3% [3] - The current consensus EPS estimate for the upcoming quarter is $1.92, with expected revenues of $320.83 million, and for the current fiscal year, the EPS estimate is $7.92 on revenues of $1.3 billion [7] - The Zacks Industry Rank for Financial - Miscellaneous Services is in the top 36% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Financial Data and Key Metrics Changes - The company reported net loan growth of $856 million linked quarter, with a net interest margin expansion of six basis points and an 18% year-over-year increase in book value per share [4][5] - Net interest income for the quarter was $280 million, up 7.7% from $260 million in the prior year period, with a net interest margin of 4.84% for the quarter, up from 4.78% in the previous quarter [5][10] - Net income was approximately $110.7 million for the quarter, compared to $105.2 million in the prior quarter, with diluted EPS of $1.92 compared to $1.81 in the previous quarter [7][8] Business Line Data and Key Metrics Changes - Total originations for investment, excluding single-family warehouse lending, increased by 5% linked quarter, resulting in net loan growth of approximately $856 million, representing a 4.2% linked quarter increase or 16% annualized [9] - Average loan yields for the quarter were 8% flat, with non-purchased loans at 7.66% and purchased loans at 14.9% [9] - Total non-accrual loans declined by $15 million linked quarter, improving the non-accrual loans to total loans ratio by 89 basis points [6][13] Market Data and Key Metrics Changes - Ending deposit balances were $20.8 billion, up 3.4% linked quarter and 7.6% year over year, with demand money market and savings accounts representing 95% of total deposits [10][11] - Total assets under custody increased from $37.1 billion to $39.4 billion, with net new assets for the custody business increasing by $215 million [16] Company Strategy and Development Direction - The company is focused on executing strategic and operational initiatives, including investments in technology and operations to scale businesses and roll out new products faster [20][21] - The company is evaluating M&A opportunities to augment growth from existing businesses and team lift-outs, with a focus on specialty lending and non-banking businesses [18][19] Management Comments on Operating Environment and Future Outlook - Management expects organic loan growth to come in toward the mid to high end of the single-digit to low teens range on an annual basis in fiscal 2026 [13][26] - The company anticipates a reduction in the income tax rate by three percentage points starting in the September 30, 2025 quarter, which will boost net income and EPS in fiscal 2026 and beyond [19][25] Other Important Information - The company has seen strong growth in accounts and balances from its Axos One consumer bundle deposit product, which supports organic loan growth [12] - The company is leveraging artificial intelligence to improve operational efficiency and speed up software development processes [20][38] Q&A Session Summary Question: Loan yields and net interest margin outlook - Management indicated that while loan yields might be tighter, there is an offsetting benefit on the funding side, resulting in a consistent net interest margin outlook [30][32] Question: Expense growth relative to revenue - Management targets that personnel and professional services cost growth should not exceed 30% of net interest income and non-interest income growth [34][35] Question: Opportunities on the funding side - Management noted that new verticals added come with favorable deposit balances, but there may be pressure on funding costs as industry loan growth picks up [46][48] Question: Fee income growth initiatives - Management believes that fee income growth will be supported by technology development and a strong pipeline of new assets [50][52] Question: Capital priorities and M&A considerations - Management is looking at organic growth and various M&A opportunities, with a focus on synergistic fee income and specialty finance businesses [56][57] Question: Multifamily loan sale reasoning - Management decided to sell certain loans based on credit perspective and interest from buyers, contributing to net loan growth [61][64] Question: Asset quality and areas of concern - Management expressed confidence in asset quality, particularly in commercial real estate and C&I portfolios, with no significant materiality expected [80][82]

Financial Data and Key Metrics Changes - The company reported net loan growth of $856 million linked quarter, with a net interest margin expansion of six basis points and an 18% year-over-year increase in book value per share [4][5] - Net interest income for the quarter was $280 million, up 7.7% from $260 million in the prior year period, with a net interest margin of 4.84% for the quarter, up from 4.78% in the previous quarter [5][10] - Net income was approximately $110.7 million for the quarter, compared to $105.2 million in the prior quarter, with diluted EPS of $1.92 compared to $1.81 in the previous quarter [6][7] Business Line Data and Key Metrics Changes - Total originations for investment, excluding single-family warehouse lending, increased by 5% linked quarter, resulting in net loan growth of approximately $856 million, representing a 4.2% linked quarter increase or 16% annualized [8] - Average loan yields for the quarter were 8% flat, with non-purchased loans at 7.66% and purchased loans at 14.9% [8] - Total non-accrual loans declined by $15 million linked quarter, improving the non-accrual loans to total loans ratio from 79 basis points to 71 basis points [6][12] Market Data and Key Metrics Changes - Ending deposit balances were $20.8 billion, up 3.4% linked quarter and 7.6% year over year, with demand money market and savings accounts representing 95% of total deposits [9][10] - Total assets under custody increased from $37.1 billion to $39.4 billion, with net new assets for the custody business increasing by $215 million [14][15] Company Strategy and Development Direction - The company is focused on executing strategic and operational initiatives, including investments in technology and operations to scale businesses and roll out new products faster [19] - The implementation of artificial intelligence is expected to improve operating efficiency and accelerate new product delivery [19] - The company is evaluating M&A opportunities to augment growth from existing businesses and team lift-outs, with a focus on specialty lending and non-banking businesses [17][20] Management Comments on Operating Environment and Future Outlook - Management expects organic loan growth to come in toward the mid to high end of the single-digit to low teens range on an annual basis in fiscal 2026 [12] - The credit quality of the loan book remains solid, with historic and current net charge-offs remaining low [12] - The change in income tax calculation methodology in California is expected to reduce the income tax rate by three percentage points starting in Q4 2025, boosting net income and EPS in fiscal 2026 and beyond [18][24] Other Important Information - The company repurchased approximately $31 million of common stock at an average price of $59 per share during a temporary market downturn [7] - The company has a healthy loan pipeline of approximately $2 billion as of July 25, 2025, with various categories contributing to growth [26] Q&A Session Summary Question: Loan yields and net interest margin outlook - Management indicated that while loan yields might be tighter, there are offsetting benefits on the funding side, resulting in a consistent net interest margin outlook [30][31] Question: Expense growth relative to revenue - Management targets that personnel and professional services cost growth should not exceed 30% of net interest income and non-interest income growth, while leveraging AI to improve efficiency [34][39] Question: Funding side opportunities and pricing competition - Management noted that funding costs may increase with accelerated loan growth, but the Axos One product is performing well, potentially mitigating some pressure [48] Question: Capital priorities and M&A opportunities - Management is looking at various M&A opportunities, particularly in fee income and specialty finance businesses, while maintaining a focus on organic loan growth [56][57] Question: Multifamily loan sale reasoning - The sale was driven by favorable credit perspectives and interest from good buyers, resulting in a gain [61] Question: Asset quality and areas of concern - Management expressed confidence in the commercial real estate and C&I sides, with no significant material concerns noted [80]

Financial Performance - Net income for the quarter ended June 30, 2025, was $110.675 million[16] - Adjusted earnings for the same period were $111.814 million[22], or $1.94 per diluted share[22] - Total assets reached $24.783 billion[13] - Total deposits amounted to $20.829 billion[13] - The company's return on average assets was 1.85%[16], and return on average common stockholders' equity was 16.85%[16] Loan Portfolio - Total loans outstanding reached $21.552 billion[3, 9, 11] - Single Family Mortgage & Warehouse loans totaled $4.395 billion[9, 11] with an ACL of $12 million[9] - Multifamily & Commercial Mortgage loans amounted to $2.941 billion[9, 11] with an ACL of $26 million[9] - Commercial Real Estate loans were $6.937 billion[9, 11] with an ACL of $114 million[9] - Commercial & Industrial Non-RE loans reached $6.796 billion[9, 11] with an ACL of $122 million[9] Credit Quality - The allowance for credit losses (ACL) was $290.049 million as of June 30, 2025[13] - Non-accrual loans represented 0.79% of total loans[16]

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Core Viewpoint - The market anticipates Axos Financial (AX) will report a year-over-year decline in earnings despite higher revenues when it releases its results for the quarter ended June 2025 [1][3]. Group 1: Earnings Expectations - The consensus estimate for Axos Financial's quarterly earnings is $1.82 per share, reflecting a year-over-year decrease of 0.6% [3]. - Expected revenues for the quarter are $312.44 million, which represents a 7.4% increase from the same quarter last year [3]. Group 2: Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 2.53% higher, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Axos Financial is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.24%, suggesting a bearish outlook from analysts [11]. Group 3: Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the deviation of actual earnings from the consensus estimate, with a strong predictive power for positive readings [7][8]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically produced a positive surprise nearly 70% of the time [8]. Group 4: Historical Performance - In the last reported quarter, Axos Financial exceeded the expected earnings of $1.74 per share, achieving actual earnings of $1.81, resulting in a surprise of +4.02% [12]. - The company has beaten consensus EPS estimates in all of the last four quarters [13]. Group 5: Industry Comparison - Another company in the Zacks Financial - Miscellaneous Services industry, Marathon Digital Holdings, is expected to post earnings of $0.24 per share for the same quarter, indicating a year-over-year increase of 200% [17]. - Marathon Digital's expected revenues are $220.24 million, up 51.7% from the previous year, but it has an Earnings ESP of -190.72%, making it difficult to predict an earnings beat [18].

Core Viewpoint - Axos Financial (AX) shares have experienced a significant rally, driven by positive market sentiment and company-specific developments, including a decrease in the effective tax rate and upward revisions in earnings estimates [1][2][3]. Company Developments - Axos Financial shares increased by 6.2% in the last trading session, closing at $83.18, with notable trading volume [1]. - The company anticipates a reduction in its effective tax rate by approximately 3% starting in fiscal 2026, leading to a one-time, non-cash impairment charge of nearly $4 million in Q4 of fiscal 2025 [2]. - DA Davidson raised its price target for Axos Financial from $92.50 to $96.00, maintaining a buy rating, reflecting the company's strong growth and profitability metrics [3]. Earnings Expectations - The upcoming quarterly earnings report for Axos Financial is expected to show earnings of $1.84 per share, representing a year-over-year increase of 0.6%, with revenues projected at $312.44 million, up 7.4% from the previous year [4]. - The consensus EPS estimate for the quarter has been revised slightly higher over the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [5]. Industry Context - Axos Financial operates within the Zacks Financial - Miscellaneous Services industry, which is currently experiencing broader market optimism, contributing to investor confidence in financial services stocks [3][5]. - Another company in the same industry, HA Sustainable Infrastructure Capital, has seen its consensus EPS estimate remain unchanged at $0.64, reflecting a year-over-year change of 1.6% [6].

Company Overview - Axos Financial (AX) currently holds a Momentum Style Score of B, indicating a favorable position in momentum investing [3] - The company has a Zacks Rank of 2 (Buy), which is associated with a strong track record of outperformance [4] Price Performance - Over the past week, shares of Axos Financial have increased by 2.84%, while the Zacks Financial - Miscellaneous Services industry remained flat [6] - In a longer time frame, AX's monthly price change is 7.09%, significantly outperforming the industry's 0.72% [6] - Over the past quarter, shares have risen by 15.48%, and over the last year, they have gained 35.15%, compared to the S&P 500's increases of 6.75% and 11.69%, respectively [7] Trading Volume - The average 20-day trading volume for Axos Financial is 325,181 shares, which serves as a baseline for price-to-volume analysis [8] Earnings Outlook - In the past two months, two earnings estimates for Axos Financial have been revised upwards, while none have been revised downwards, leading to an increase in the consensus estimate from $7.22 to $7.38 [10] - For the next fiscal year, one estimate has moved upwards with no downward revisions during the same period [10] Conclusion - Considering the positive price trends and earnings outlook, Axos Financial is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a potential candidate for near-term investment [12]