Axos Financial, Inc. (NYSE:AX) Performance Analysis

• Axos Financial's ROIC of 16.68% and WACC of 19.54% result in a ROIC to WACC ratio of 0.85, indicating it does not generate returns exceeding its cost of capital.
• Compared to peers, Axos has a higher ROIC to WACC ratio than most, showcasing better capital efficiency except when compared to Cadence Bank.
• Cadence Bank exhibits the highest ROIC to WACC ratio among peers, highlighting its efficient capital use relative to cost.

Axos Financial, Inc. (NYSE:AX) is a financial services company that provides banking and lending products. It operates primarily through its digital platform, offering a range of services including personal banking, business banking, and investment services. In the competitive landscape, Axos faces peers like Ameris Bancorp, Cadence Bank, BankUnited, and others.

In evaluating Axos Financial's performance, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial metrics. Axos has a ROIC of 16.68% and a WACC of 19.54%, resulting in a ROIC to WACC ratio of 0.85. This indicates that Axos is not generating returns that exceed its cost of capital, which is a key concern for investors.

When compared to its peers, Axos Financial's ROIC to WACC ratio of 0.85 is higher than most, except for Cadence Bank. Ameris Bancorp, for instance, has a ROIC to WACC ratio of 0.28, with a ROIC of 4.03% and a WACC of 14.28%. This suggests that Axos is more efficient in using its capital compared to Ameris Bancorp.

Cadence Bank stands out with the highest ROIC to WACC ratio of 0.59 among the peers. Despite having a ROIC of 6.24%, which is not the highest, its lower WACC of 10.58% allows it to achieve a better balance between returns and cost of capital. This highlights Cadence Bank's efficient capital use relative to its cost.

Other peers like BankUnited and Pacific Premier Bancorp show even lower ROIC to WACC ratios of 0.16 and -0.07, respectively. This further emphasizes Axos Financial's relatively better performance in terms of capital efficiency, despite not exceeding its cost of capital.