Breaking Down Axos Financial, Inc. (AX) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and looking for a comprehensive analysis of Axos Financial Inc. (AX)? Did you know that Axos Financial was the top bank with greater than $10 billion in total assets at year-end in the 2024 S&P Global Market Intelligence financial performance ranking of major exchange-traded US banks? For the fiscal year ended June 30, 2024, net income was $450.0 million, an increase of 46.5% from net income of $307.2 million for the fiscal year ended June 30, 2023. With diluted earnings per share at $7.66 for the fiscal year ended June 30, 2024, reflecting a substantial increase of $2.59, or 51.1%, compared to diluted earnings per share of $5.07 the previous year, let's dive into the key insights that can help you assess its financial health and make informed decisions.

Axos Financial, Inc. (AX) Revenue Analysis

Understanding Axos Financial, Inc. (AX)'s financial health involves a detailed look at its revenue streams. A comprehensive analysis includes identifying primary revenue sources, examining year-over-year growth, assessing the contribution of different business segments, and understanding significant changes in revenue composition.

For the fiscal year ending June 30, 2024, Axos Financial reported a revenue of $1.06 billion, marking a 20.45% increase compared to the previous year. Looking at more recent data, the company's revenue for the last twelve months ending December 31, 2024, reached $1.18 billion, a 25.01% increase year-over-year. Quarterly revenue for the period ending December 31, 2024, was $295.65 million, reflecting a 19.77% growth.

Axos Financial operates through two primary segments:

• Banking Business Segment
• Securities Business Segment

A diversified deposit-gathering business supports these segments:

• Small Business Banking: $0.4 billion
• Commercial & Treasury Management: $3.8 billion
• Securities: $0.8 billion

Non-interest income also plays a significant role. For the three months ended September 30, 2024, total non-interest income reached $114.4 million, which includes fee income from the Axos Advisor Services (AAS) business acquired on August 2, 2021. The Securities segment has seen substantial growth, with fee income increasing by 548% between June 30, 2019, and September 30, 2024.

Here’s a summary of Axos Financial’s revenue performance over recent years:

For further insights into Axos Financial, Inc. (AX)'s financial health, you can refer to: Breaking Down Axos Financial, Inc. (AX) Financial Health: Key Insights for Investors

Axos Financial, Inc. (AX) Profitability Metrics

Assessing Axos Financial, Inc. (AX)'s financial health requires a close examination of its profitability metrics. Key indicators such as gross profit, operating profit, and net profit margins provide insights into the company's efficiency and ability to generate earnings. Analyzing these metrics over time and comparing them against industry averages helps investors understand Axos's competitive positioning and financial performance. Let's explore these critical areas in detail.

Here's a detailed look into Axos Financial, Inc.'s profitability:

Gross Profit Margin:

2024: Axos Financial reported a gross profit of $642.72 million. With total revenue of $781.82 million, the gross profit margin calculates to approximately 82.21%.

Operating Profit Margin:

2024: The operating income was $359.75 million. Factoring in the total revenue of $781.82 million, the operating profit margin is about 46.02%.

Net Profit Margin:

2024: Axos Financial's net income stood at $303.98 million. Considering the total revenue of $781.82 million, the net profit margin is approximately 38.88%.

To provide a clearer picture, here's a table summarizing these profitability metrics:

These figures highlight Axos Financial's strong profitability in 2024. The high gross profit margin indicates efficient core operations, while the operating and net profit margins reflect effective management of operating expenses and overall financial health.

Analyzing trends in profitability over time provides valuable insights into Axos Financial, Inc.'s performance. Consistent or improving margins suggest effective management and a strong competitive position, while declining margins may indicate challenges in cost control or revenue generation. Investors should monitor these trends to assess the long-term sustainability of Axos's profitability.

Here are some key factors influencing Axos Financial, Inc.'s operational efficiency:

• Cost Management: Efficient cost management is crucial for maintaining and improving profitability.
• Gross Margin Trends: Monitoring gross margin trends helps assess the company's ability to control the cost of goods or services and maintain pricing power.

Understanding these factors is essential for investors seeking to evaluate Axos Financial, Inc.'s long-term financial health and investment potential. For more insights into the company's strategic direction, consider reading about : Mission Statement, Vision, & Core Values of Axos Financial, Inc. (AX).

Axos Financial, Inc. (AX) Debt vs. Equity Structure

Axos Financial, Inc. (AX) strategically uses a mix of debt and equity to fuel its growth and manage its financial obligations. Understanding the specifics of their debt levels, ratios, and financing activities provides key insights into the company's financial health and approach to risk.

As of June 30, 2024, Axos Financial reported the following debt details:

• Total debt: $848.04 million
• Total assets: $19.47 billion

This data suggests a leverage ratio that investors should consider in the context of the company's overall financial strategy.

The debt-to-equity (D/E) ratio is a critical metric for evaluating a company's financial leverage. As of March 31, 2024, Axos Financial's D/E ratio stood at 0.52. This ratio indicates the proportion of equity and debt the company uses to finance its assets. A lower D/E ratio typically suggests a more conservative financing approach, relying more on equity than debt. However, the ideal D/E ratio varies by industry, so it's essential to compare Axos Financial's ratio against its peers to gauge whether it's within a healthy range. Some sources indicate an industry average D/E ratio of around 1.0, suggesting Axos Financial is less leveraged than its peers.

Axos Financial strategically manages its capital structure through various financing activities. For instance, in 2023, Axos Financial, Inc. announced the pricing of $375 million aggregate principal amount of 6.250% Fixed-to-Floating Rate Subordinated Notes due 2033. These notes initially bear interest at a fixed rate of 6.250% per annum until September 15, 2028, payable semi-annually in arrears. From September 15, 2028, the interest rate will reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 346 basis points, payable quarterly in arrears.

Here’s a summary of Axos Financial's debt and equity components:

Axos Financial's approach to balancing debt and equity is crucial for maintaining financial flexibility and supporting future growth. Monitoring these elements helps investors assess the company's risk profile and long-term stability. For more insights, check out: Breaking Down Axos Financial, Inc. (AX) Financial Health: Key Insights for Investors

Axos Financial, Inc. (AX) Liquidity and Solvency

Liquidity and solvency are crucial indicators of a financial institution's ability to meet its short-term and long-term obligations. For investors in Axos Financial, Inc. (AX), understanding these metrics provides insights into the company's financial health and stability.

Here's an overview of key liquidity measures and cash flow trends for Axos Financial, Inc. (AX), based on the latest available data:

Assessing Axos Financial, Inc. (AX)'s Liquidity:

Current and Quick Ratios: These ratios assess a company's ability to cover its short-term liabilities with its short-term assets. A higher ratio generally indicates better liquidity. For Axos Financial, Inc. (AX), analyzing these ratios over time can reveal trends in its liquidity position.

Analysis of Working Capital Trends: Working capital, calculated as current assets minus current liabilities, is a measure of a company's operational liquidity. Monitoring changes in working capital can highlight potential liquidity issues or improvements.

Cash Flow Statements Overview: A review of Axos Financial, Inc. (AX)'s cash flow statements provides a comprehensive view of its cash inflows and outflows. The cash flow statement is divided into three main sections:

• Operating Activities: This section reflects the cash generated or used from the company's core business operations. Positive cash flow from operations is a healthy sign, indicating that the company is generating enough cash to sustain and grow its business.
• Investing Activities: This section includes cash flows related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E), and investments in securities.
• Financing Activities: This section involves cash flows related to debt, equity, and dividends. It shows how the company is financing its operations and returning value to shareholders.

Cash Flow Trends: Evaluating the trends in operating, investing, and financing cash flows can provide insights into Axos Financial, Inc. (AX)'s financial strategy and health. For example:

• Consistent positive cash flow from operations suggests strong business performance.
• Significant cash outflows for investing activities might indicate investments in growth opportunities.
• Changes in financing activities could reflect shifts in the company's capital structure or dividend policy.

Potential Liquidity Concerns or Strengths:

By analyzing the current and quick ratios, working capital trends, and cash flow statements, investors can identify potential liquidity concerns or strengths for Axos Financial, Inc. (AX). For instance:

• A declining current ratio coupled with negative operating cash flow might signal liquidity issues.
• Conversely, a rising current ratio and strong positive operating cash flow indicate a solid liquidity position.

Here is a sample table illustrating the cash flows (in thousands) for Axos Financial, Inc. (AX) based on the 2024 data:

Understanding Axos Financial, Inc. (AX)'s liquidity and solvency is essential for making informed investment decisions. These metrics provide valuable insights into the company's financial stability and ability to meet its obligations.

Read more about Axos Financial, Inc. (AX) investor profile: Exploring Axos Financial, Inc. (AX) Investor Profile: Who’s Buying and Why?

Axos Financial, Inc. (AX) Valuation Analysis

Determining whether Axos Financial, Inc. (AX) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment.

Several key metrics can provide insight into Axos Financial's valuation:

• Price-to-Earnings (P/E) Ratio: This ratio compares the company's stock price to its earnings per share. A lower P/E ratio might suggest undervaluation relative to peers or its historical average.
• Price-to-Book (P/B) Ratio: This ratio compares the company's market capitalization to its book value of equity. A P/B ratio below 1.0 could indicate undervaluation, while a higher ratio may suggest overvaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares the company's enterprise value (market cap plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization. It provides a more comprehensive valuation measure, especially for companies with significant debt.

Analyzing Axos Financial, Inc. (AX)'s stock price trends over the last 12 months (or longer) provides context on market sentiment and historical performance. A consistent upward trend might reflect investor confidence, while volatility could indicate uncertainty.

As of now, Axos Financial's dividend yield is approximately 1.28%. The dividend payout ratio, which indicates the percentage of earnings paid out as dividends, can be evaluated to assess the sustainability of dividend payments. A payout ratio that is too high may indicate that the company is not reinvesting enough in its business, while a low ratio may suggest room for future dividend increases.

Here's an overview of analyst ratings for Axos Financial, Inc. (AX):

• Buy: Analysts recommending a 'buy' rating believe the stock is likely to outperform the market.
• Hold: A 'hold' rating suggests that the stock is expected to perform in line with the market.
• Sell: Analysts with a 'sell' rating anticipate the stock will underperform the market.

Based on the latest available data, the analyst consensus on Axos Financial's stock valuation leans towards a 'buy', with a price target suggesting potential upside from its current trading price. However, investors should conduct their own due diligence and consider their individual risk tolerance before making any investment decisions. For further insights into Axos Financial's strategic direction, consider exploring the Mission Statement, Vision, & Core Values of Axos Financial, Inc. (AX).

Here's a hypothetical overview of valuation ratios for Axos Financial, Inc. (AX) compared to its industry average. Note that these numbers are examples and should be replaced with real-time data for accurate analysis.

Axos Financial, Inc. (AX) Risk Factors

Assessing the financial health of Axos Financial, Inc. (AX) requires a close look at the various risks that could impact its performance. These risks stem from both internal and external factors, encompassing industry competition, regulatory changes, and broader market conditions.

Here's a breakdown of key risks:

• Industry Competition: The financial services industry is intensely competitive. Axos Financial faces competition from traditional brick-and-mortar banks, credit unions, and other online financial service providers. Increased competition could pressure Axos Financial's profit margins and limit its ability to grow its customer base.
• Regulatory Changes: Banks are subject to extensive regulation, and changes in laws and regulations can significantly affect Axos Financial's operations and profitability. This includes regulations related to capital requirements, lending practices, and consumer protection.
• Market Conditions: Economic downturns, changes in interest rates, and other market fluctuations can impact Axos Financial's financial performance. For example, rising interest rates can increase the cost of funds, while a recession can lead to higher loan losses.

Operational, financial, and strategic risks are often detailed in Axos Financial's earnings reports and filings with the Securities and Exchange Commission (SEC). These documents provide insights into specific challenges and uncertainties the company faces. Reviewing these filings is essential for a comprehensive understanding of the company's risk profile.

Mitigation strategies are plans that Axos Financial may implement to address specific risks. These strategies could include diversifying its loan portfolio, strengthening its risk management framework, or enhancing its cybersecurity defenses.

For example, Axos Financial actively manages credit risk through rigorous underwriting standards and ongoing monitoring of its loan portfolio. They also invest in technology and cybersecurity measures to protect against data breaches and fraud.

Here is a look at some potential risks and mitigation strategies:

More information on Axos Financial, Inc. (AX) Financial Health can be found here: Breaking Down Axos Financial, Inc. (AX) Financial Health: Key Insights for Investors

Axos Financial, Inc. (AX) Growth Opportunities

Several factors could drive Axos Financial, Inc.'s (AX) future growth. These include strategic initiatives, market conditions, and the company's competitive positioning.

Here’s a look into the potential growth drivers:

• Product Innovations: Axos Financial's ability to introduce new and attractive financial products and services could significantly boost its growth.
• Market Expansions: Entering new geographic markets or expanding its services to new customer segments can unlock additional growth opportunities.
• Acquisitions: Strategic acquisitions of other financial institutions or fintech companies can quickly expand Axos Financial's market share and service offerings.

Revenue growth projections and earnings estimates provide a quantitative outlook. While specific figures can fluctuate based on market dynamics and internal strategies, analysts' estimates offer a sense of the company's potential trajectory. For instance, monitoring trends in net interest income, loan growth, and fee income can provide insights into revenue progression.

Strategic initiatives and partnerships play a crucial role in shaping Axos Financial's growth. These could include:

• Technological upgrades to enhance the digital banking experience.
• Partnerships with fintech firms to offer innovative financial solutions.
• Expansion of its lending portfolio through strategic alliances.

A critical element of Axos Financial's growth prospects is its competitive advantages. These advantages enable the company to outperform peers and capture a larger market share. Key competitive strengths may include:

• Efficient operations: A focus on technology and streamlined processes can lead to lower operating costs and better profitability.
• Strong asset quality: Prudent lending practices and effective risk management can result in a high-quality loan portfolio and fewer losses.
• Customer service: Superior customer experience can drive customer loyalty and attract new customers through positive word-of-mouth.

Here is a table illustrating potential future performance indicators:

For more detailed insights into Axos Financial, Inc.'s (AX) financial health, you can refer to: Breaking Down Axos Financial, Inc. (AX) Financial Health: Key Insights for Investors