Last week saw the newest full-year earnings release from Axos Financial, Inc. (NYSE:AX), an important milestone in the company's journey to build a stronger business. Revenues came in 4.0% below expectations, at US$620m. Statutory earnings per share were relatively better off, with a per-share profit of US$3.56 being roughly in line with analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the five analysts covering Axos Financial are now predicting revenues of US$695.8m in 2022. If met, this would reflect a meaningful 12% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to reduce 2.5% to US$3.55 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$702.9m and earnings per share (EPS) of US$3.57 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$55.50, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Axos Financial at US$60.00 per share, while the most bearish prices it at US$52.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Axos Financial'shistorical trends, as the 12% annualised revenue growth to the end of 2022 is roughly in line with the 13% annual revenue growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues fall 3.1% per year. So not only is Axos Financial expected to maintain its revenue growth despite the wider downturn, it's also forecast to grow faster than the industry as a whole.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, they made no changes to their revenue estimates - and they expect sales to perform better than the wider industry. The consensus price target held steady at US$55.50, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Axos Financial going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example - Axos Financial has 1 warning sign we think you should be aware of.
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