Axos Financial(AX) ZACKS·2025-05-02 17:05Core Viewpoint - Axos Financial (AX) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in determining near-term stock price movements, making it a valuable tool for investors [2][3]. - Institutional investors play a role in this relationship, as they adjust their valuations based on earnings estimates, leading to stock price movements when they buy or sell shares [3]. Business Improvement Indicators - The rising earnings estimates and the Zacks rating upgrade for Axos Financial suggest an improvement in the company's underlying business, which could lead to higher stock prices as investors respond positively [4]. Importance of Earnings Estimate Revisions - Empirical research indicates a strong correlation between earnings estimate revisions and stock movements, highlighting the significance of tracking these revisions for investment decisions [5]. - The Zacks Rank system effectively utilizes earnings estimate revisions to classify stocks, providing a structured approach to investment [6]. Current Earnings Estimates for Axos Financial - Axos Financial is projected to earn $7.30 per share for the fiscal year ending June 2025, reflecting a year-over-year decline of 4.7%. However, the Zacks Consensus Estimate has increased by 0.8% over the past three months, indicating positive sentiment among analysts [7]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of ratings, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revisions [8][9]. - The upgrade of Axos Financial to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [9].