Axos Financial, Inc. (NYSE: AX)

Sector: Financial Services Industry: Banks - Regional CIK: 0001299709
Market Cap 4.93 Bn
P/B 1.76
P/E 11.39
P/S 4.10
ROIC (Qtr) 12.58
Div Yield % 0.00
Rev 1y % (Qtr) -0.17
Total Debt (Qtr) 1.35 Bn
Debt/Equity (Qtr) 0.48

About

Axos Financial, Inc., often referred to as Axos Bank, is a diversified financial services company operating in the banking and securities industries. With approximately $20.3 billion in assets and $34.8 billion in assets under custody and/or administration at Axos Clearing LLC, the company is a significant player in the financial sector. Axos Financial, Inc. is engaged in various business activities, primarily in the Banking Business and Securities Business segments. The Banking Business segment offers a range of banking services, including online...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 537.98M provides strong 12.64x coverage of stock compensation 42.56M, indicating sustainable incentive practices.
  • Strong tangible asset base of 27.23B provides 20.13x coverage of total debt 1.35B, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 492.38M exceeds capital expenditure of 45.59M by 10.80x, indicating strong organic growth funding capability.
  • Operating cash flow of 537.98M provides strong 7.26x coverage of operating expenses 74.09M, showing operational efficiency.
  • Retained earnings of 2.73B provide strong 13.27x coverage of intangibles 205.75M, indicating quality earnings retention.

Bear case

  • Operating cash flow of 537.98M barely covers its investment activities of (2.83B), with a coverage ratio of -0.19, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 2.89B provide limited coverage of acquisition spending of (474.45M), which is -6.08x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 537.98M is outpaced by equity issuance of (84.84M) (-6.34 ratio), indicating concerning reliance on equity markets for funding operations.
  • R&D investment of 0 represents just 0x of SG&A expenses of 524.39M, indicating potential underinvestment in innovation relative to administrative overhead.
  • Deposit liabilities of 22.26B significantly exceed cash reserves of 2.89B, which is 7.72x, indicating potential liquidity risk in stress scenarios.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.11 0.14
EV to Cash from Ops. EV/CFO 5.81 7.21
EV to Debt EV to Debt 2.31 5.20
EV to EBIT EV/EBIT 5.17 14.98
EV to EBITDA EV/EBITDA 4.93 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 6.35 8.87
EV to Market Cap EV to Market Cap 0.63 1.04
EV to Revenue EV/Rev 2.60 -3.76
Price to Book Value [P/B] P/B 1.76 1.17
Price to Earnings [P/E] P/E 11.39 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 35.28
Dividend per Basic Share Div per Share (Qtr) 0.00 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 3.49 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 2.92 15.78
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -9.75 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -10.09 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) -10.71 61.46
EBT Growth (1y) % EBT 1y % (Qtr) -10.71 61.37
EPS Growth (1y) % EPS 1y % (Qtr) -9.29 76.34
FCF Growth (1y) % FCF 1y % (Qtr) 67.00 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.39 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.48 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 52.70 147.97
EBIT Margin % EBIT Margin % (Qtr) 50.23 155.41
EBT Margin % EBT Margin % (Qtr) 50.23 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 36.00 115.63