On Wednesday, Keefe, Bruyette & Woods maintained their Outperform rating and $79.00 stock price target for Axos Financial (NYSE:AX). This affirmation came after Axos Financial issued a strong rebuttal to a short seller report that had earlier questioned the company's commercial real estate (CRE) exposure and underwriting practices. Axos Financial detailed specific inaccuracies and misrepresentations in the short report through an 8-K filing released around 3 p.m.
The firm's analysts believe that the clarification provided by Axos should reassure investors. This sentiment was reflected in the stock's performance, as it recovered from its initial dip to close the day down by 4.2%. This drop represented a 270 basis point underperformance compared to the KRX.
The Outperform rating by Keefe, Bruyette & Woods suggests confidence in Axos Financial's stock, valuing it at 1.4 times tangible book value and 7 times its projected fiscal year 2025 earnings. The company's prompt response to the short seller's allegations was seen as a positive move, helping to stabilize the stock after the initial impact of the report.
Axos Financial's proactive approach in addressing the short seller's claims underscores their commitment to transparency and investor relations. The firm's evaluation and continued positive outlook on Axos Financial indicate a belief in the company's fundamental strength and potential for growth.
In other recent news, Axos Financial has been the subject of various developments. The financial institution reported significant growth in its third-quarter earnings for fiscal 2024, with a 38.7% year-over-year increase in net income, reaching $111 million.
This is the seventh consecutive quarter of double-digit growth in earnings per share, book value per share, and ending loan balances. Axos Financial's deposit growth also exceeded net loan growth by approximately $900 million, and the company's net interest margin improved to 4.87%, up from 4.42% in the same period last year.
On the other hand, Hindenburg Research has established a short position in Axos Financial, raising concerns about the bank's underwriting standards and its involvement in the commercial real estate market. Axos Financial has not yet publicly responded to these claims.
Meanwhile, analysts from Keefe, Bruyette & Woods and Piper Sandler have adjusted their outlook on Axos Financial shares, increasing the price target and maintaining positive ratings based on the company's strong performance. These are some of the recent developments surrounding Axos Financial.
InvestingPro Insights
Amidst the recent challenges faced by Axos Financial, the company's financial metrics and analyst outlook provide a broader context for investors. According to InvestingPro data, Axos Financial boasts a market capitalization of $2.91 billion and an attractive P/E ratio of 6.83, which suggests that the stock is trading at a low price relative to near-term earnings growth.
Moreover, the company's revenue growth for the last twelve months as of Q3 2024 stands at an impressive 19.94%, with a particularly strong quarterly growth of 27.93% in Q3 2024. These figures underscore Axos Financial's robust financial performance and potential for future growth.
InvestingPro Tips reveal that analysts have revised their earnings upwards for the upcoming period, reflecting optimism about the company's financial prospects. Furthermore, Axos Financial is predicted to be profitable this year, having already been profitable over the last twelve months.
The stock's performance over the past month has been less favorable, with a 12.65% decline, yet the company's fundamental financial health remains solid, with no dividend payouts, allowing for reinvestment back into the company's growth initiatives.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available at: https://www.investing.com/pro/AX. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further insights that could guide investment decisions.
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