4 Reasons to Add Axos Financial (AX) Stock to Your Portfolio
It seems to be a wise idea to add Axos Financial, Inc. AX stock to your portfolio now. In the current high-interest-rate environment, the company is on track for margin growth. Given its robust loan balance, along with higher interest rates, its top line is expected to improve.
The Zacks Consensus Estimate for AX’s current fiscal-year earnings has been revised 1.7% upward over the past 60 days, reflecting analysts’ optimism regarding its earnings growth potential. Thus, the company currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of AX have gained 6.3% in the past six months, outperforming 5.7% growth recorded by the industry.
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A few other aspects that make Axos Financial an attractive investment option right now are mentioned below.
Earnings Growth: In the last three to five years, the company witnessed earnings per share (EPS) growth of 15.5%, higher than the industry’s rise of 12%. The upward trend is expected to continue in the near term. In fiscal 2023 and 2024, Axos Financial’s earnings are projected to grow 16.1% and 9%, respectively.
Revenue Strength: Driven by robust loan growth and higher interest rates, Axos Financial’s revenues witnessed a compound annual growth rate (CAGR) of 11.4% over the last three fiscal years (ended Jun 30, 2022).
In fiscal 2023 and 2024, the company’s revenues are projected to grow 24.6% and 6.9%, respectively.
Superior Return on Equity (ROE): The company’s ROE of 17.46% is higher than the industry average of 10.45%. This shows that it reinvests its cash more efficiently than its peers.
Favorable Valuation: The AX stock seems undervalued right now when compared with the broader industry. The company’s price/earnings (F1) ratio of 8.22 is lower than the industry average of 9.20.
Moreover, it has a Value Score of B. The Value Style Score condenses all valuation metrics into one actionable score, which helps investors steer clear of 'value traps' and identify stocks that are truly trading at a discount.
Other Stocks to Consider
A couple of other top-ranked stocks from the same space are Virtu Financial, Inc. VIRT and WisdomTree, Inc. WT, currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings estimates for VIRT have been revised 3.4% upward for 2023 over the past 60 days. Virtu Financial’s share price has increased 4% over the past three months.
WisdomTree’s earnings estimates have been revised upward by 16.7% for the current year over the past 60 days. In three months’ time, WT’s share price has increased 20.6%.
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Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report
AXOS FINANCIAL, INC (AX) : Free Stock Analysis Report
WisdomTree, Inc. (WT) : Free Stock Analysis Report
