Is AX a high-quality business?

AlphaMadera's AlphaQuality grade scores Axos Financial, Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how AX compares to a Buffett-style quality bar.

What is Axos Financial, Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to AX based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes AX a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

AX - Axos Financial, Inc.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $124.50 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Banks, Insurers & Asset Managers

AlphaQuality — archetype-weighted quantitative grade

B- 68.0 / 100 composite

Composite Grade

Composite of six pillars weighted for banks, insurers & asset managers businesses. Purely quantitative — the six pillars score only reported financials, no analyst input.

Profitability

Weight: 25%

B- 66.4

Scored using efficiency ratio — bank-archetype substitution.

Efficiency Ratio (FY2026) 49.5% 91/100
Efficiency Ratio Trend +0.98 pp/yr 21/100

Capital Efficiency

Weight: 15%

A- 81.7

5yr Avg ROE 16.4% 83/100
5yr Share-Count CAGR -0.9% 79/100

Growth Quality

Weight: 15%

B 72.2

Scored using revenue growth cross-checked against efficiency-ratio trend — bank-archetype substitution.

5yr Revenue CAGR 25.2% 100/100
Efficiency Ratio Trend (growth quality check) +0.98 pp/yr 21/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 15%

C- 45.1

Scored using efficiency-ratio stability — bank-archetype substitution.

Efficiency Ratio Stability (σ) 0.06 45/100

Balance Sheet

Weight: 20%

A- 81.7

Scored using equity-to-assets — bank-archetype substitution.

Equity / Assets 10.6% 82/100

Stability

Weight: 10%

C 53.0

EPS Volatility (σ/μ) 0.56 25/100
Negative-Revenue Years (5) 0/5 100/100
Piotroski F-Score 5 56/100

0 of 2 gurus held; 2 full exits.

Holders: 0 -2
Avg Δ position: —
New buys: 0
Full exits: 2

Cooperman sold -100%
Laffont sold -100%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — Efficiency Ratio (FY2026), Efficiency Ratio Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (15%) — 5yr Revenue CAGR, Efficiency Ratio Trend (growth quality check), Revenue-Growth Years (5)
Cash Generation (15%) — Efficiency Ratio Stability (σ)
Balance Sheet (20%) — Equity / Assets
Stability (10%) — EPS Volatility (σ/μ), Negative-Revenue Years (5), Piotroski F-Score

The six pillars read only reported financial-statement fields — no analyst targets or consensus ratings. The archetype that picks which pillar formulas apply is not fully price-free, though: it can route a company to the distressed/ungradable archetype based on price vs. its 52-week high, and beta affects one classification check. A minimum of 5 fiscal years of audited statements is required. Insurers and banks are graded on their own methodology — insurers on loss ratio, its trend and stability, and premiums-to-surplus; banks on the efficiency ratio, its trend and stability, and equity-to-assets — rather than on industrial margin/ROIC signals. Distressed, highly leveraged infrastructure, asset-manager, and other financial businesses are declared ungradable rather than forced into a numeric score.