Axos Financial (AX) Soars 6.7%: Is Further Upside Left in the Stock?

·2 min read

Axos Financial AX shares rallied 6.7% in the last trading session to close at $36.29. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 31.5% loss over the past four weeks.

After stumbling significantly over the past few trading days, the trend for AX has reversed. Following the fall-out from the collapse of two S&P 500 companies, investors have regained some confidence in the finance sector amid the steps taken by regulators to avert a full-blown bank run. Moreover, inflation numbers have come out as expected, which has further reinforced investor optimism. These developments drove the AX stock higher in last day’s trading session.

This bank holding company is expected to post quarterly earnings of $1.22 per share in its upcoming report, which represents a year-over-year change of +16.2%. Revenues are expected to be $222.66 million, up 24.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Axos Financial, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Axos Financial is a member of the Zacks Financial - Miscellaneous Services industry. One other stock in the same industry, Synchrony SYF, finished the last trading session 4.1% higher at $30.46. SYF has returned -21% over the past month.

For Synchrony , the consensus EPS estimate for the upcoming report has changed -0.6% over the past month to $1.67. This represents a change of -3.5% from what the company reported a year ago. Synchrony currently has a Zacks Rank of #3 (Hold).

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