Axos Financial's Core Business Strong But This Segment 'Is A Hidden Gem,' Says Analyst
Priya Nigam 1 year ago
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Axos Advisor Services, which had around $28 billion in assets under custody as of March 31, "is a hidden gem," Kyle Peterson says.
While Axos Financial Inc's (NYSE:AX) loan growth is likely to remain "impressive," the company's advisor services segment "is adding another leg to the growth story," according to Needham.
The Analyst: Analyst Kyle Peterson maintained a Buy rating and price target of $88.
The Thesis: Axos Advisor Services, which had around $28 billion in assets under custody as of March 31, "is a hidden gem," Peterson said in the note.
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Axos Advisor Services is the sixth largest RIA (registered investment advisor) custodian in the US. It has 212 RIAs who have more than $1 million in assets under custody.
"This business is ~12% of revenue, and we believe it is underappreciated, especially given the efforts to combine custody, clearing, and banking under one umbrella," the analyst wrote.
He further stated that Axos Financial is leveraging AI much more than its banking and fintech peers, and this is likely to emerge as a margin tailwind.
AX Price Action: Axos shares had risen by 0.64% to $72.01 at the time of publication on Monday.
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