Taking Stock of Axos Financial (AX): Reassessing Valuation After Fresh Analyst Upgrades and Improving Sentiment

Axos Financial (AX) has been catching more positive attention lately, with fresh upgrades from research services like Zacks and IBD highlighting its value profile and improving price performance relative to other bank stocks.

See our latest analysis for Axos Financial.

That improving sentiment seems to be feeding into the price action, with a roughly 9 percent 1 month share price return and a 25 percent year to date share price gain, alongside a powerful 3 year total shareholder return above 130 percent. This suggests momentum is building as investors reassess Axos as a growth oriented value bank.

If Axos has you rethinking what is possible in financials, it could be a good moment to broaden your search and discover fast growing stocks with high insider ownership.

With analysts flagging Axos as a value stock trading at a discount to both its own earnings power and Wall Street targets, the key question now is whether this is a fresh buying opportunity or if markets are already pricing in the next leg of growth.

Most Popular Narrative: 14.2% Undervalued

Axos Financial's most followed narrative places fair value at around $100.50 per share versus the last close of $86.20, framing the stock as meaningfully mispriced while hinging on steady, compounding growth.

The analysts have a consensus price target of $100.167 for Axos Financial based on their expectations of its future earnings growth, profit margins and other risk factors. In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.5 billion, earnings will come to $544.2 million, and it would be trading on a PE ratio of 12.1x, assuming you use a discount rate of 6.8%.

Read the complete narrative.

Want to see how a mid tier digital bank gets treated like a compounder, not a cyclical lender? The narrative quietly leans on durable double digit top line expansion, resilient margins and a richer future earnings multiple that looks more like a quality growth franchise than a traditional bank. Curious which assumptions have to hold for that upside to stick?

Result: Fair Value of $100.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this picture could crack if credit quality deteriorates in Axos's niche loan books, or if rising competition erodes its digital cost advantage.

Find out about the key risks to this Axos Financial narrative.

Build Your Own Axos Financial Narrative

If this outlook does not fully resonate with you, or you would rather dig into the numbers yourself, you can build a custom view in just a few minutes, Do it your way.

A great starting point for your Axos Financial research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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