The firm upgraded the holding company for BOFI Federal Bank's rating based on the recent H & R Block (HRB) deal.
H & R Block sold its bank unit to BOFI Federal Bank, which freed the company from Federal Reserve oversight, Reuters reported.
The firm says the H & R Block transaction "is more accretive than we had been modeling and improves the revenue and deposit composition of the bank."
"Additional, the transaction enhances the earnings growth prospect and profitability levels (ROA and ROTCE) going forward," the firm continued.
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 a number of 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, compelling growth in net income, robust revenue growth and notable return on equity. 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: