Why BofI Holding (BOFI) Stock Is Spiking Today

NEW YORK (TheStreet) -- BofI Holding (BOFI) shares spiked on the news it had agreed to purchase H&R Block's (HRB) bank unit. 

BofI Holding, owner of Bank of Internet USA, said it expects to annual revenues of around $26 to $28 million dollars from the unit beginning fiscal 2015.

The deal has yet to pass regulatory approval.

Shares of BofI are popping 11% to $82.66.

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TheStreet Ratings team rates BOFI HOLDING INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate BOFI HOLDING INC (BOFI) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, robust revenue growth, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 26.3%. Since the same quarter one year prior, revenues rose by 17.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, BOFI HOLDING INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for BOFI HOLDING INC is currently very high, coming in at 79.90%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.12% significantly outperformed against the industry average.
  • Powered by its strong earnings growth of 30.00% and other important driving factors, this stock has surged by 129.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BOFI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • BOFI HOLDING INC has improved earnings per share by 30.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BOFI HOLDING INC increased its bottom line by earning $2.89 versus $2.34 in the prior year. This year, the market expects an improvement in earnings ($3.78 versus $2.89).
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