Axos Financial, Inc.

AI-generated fair value estimate for this company.

Method: 10-year residual income (excess-ROE) model (not an unlevered FCF DCF, which is inappropriate for a bank since deposits/debt are operating inputs, not financing): $3,166M starting book value of equity; ROE starting at 16.78% (FY2026 actual) fading linearly to 12% by year 10 as competitive/regulatory pressure normalizes returns; 10% cost of equity; book value assumed to compound at each year's ROE (Axos retains all earnings, pays no dividend); residual income = (ROE-Cost of equity) x prior book value, discounted at 10%; terminal value assumed at zero beyond year 10 (ROE converges to cost of equity); 56.73 million shares outstanding.

Reasoning: Axos is a highly profitable digital-only bank; the appropriate valuation framework for a bank is book value plus the present value of future economic (excess-ROE) profits rather than unlevered free cash flow, and the ROE fade reflects the standard assumption that abnormally high returns attract competition and moderate over time even for a structurally low-cost operator.