Atlanticus (NASDAQ:ATLC) Issues Earnings Results

Atlanticus (NASDAQ:ATLC) announced its earnings results on Thursday. The credit services provider reported $2.50 earnings per share for the quarter, topping analysts’ consensus estimates of $2.42 by $0.08, Zacks reports. The business had revenue of $744.31 million during the quarter, compared to the consensus estimate of $716.35 million. Atlanticus had a net margin of 5.80% and a return on equity of 26.06%.

Here are the key takeaways from Atlanticus’ conference call:

• Record profitability: Second-quarter net income rose 67% year over year to $47.4 million, with revenue up 89% to $744 million and return on average equity of 28.1%, above the company’s 20% long-term target.
• The Mercury acquisition is performing ahead of expectations, with portfolio repricing, consumer adoption, overhead synergies, and technical integration progressing faster than modeled; most integration work is expected to be completed by mid-first quarter 2027.
• Growth remains strong beyond Mercury: legacy managed receivables increased 26% year over year, active accounts grew by more than 1 million, and the company added a record 790,000 new customers during the quarter.
• Credit performance remains broadly in line with models, with sequentially improved delinquencies and a combined principal net charge-off rate of 17.7%; management cautioned that delinquency and charge-off rates could rise modestly as receivables season and portfolio mix changes.
• Funding and liquidity remain favorable, supported by $645 million of cash and restricted cash, strong financing-partner demand, tighter ABS spreads, and the company’s first AAA-rated ABS bonds. However, intense competition and a more than 50% increase in industry direct-mail solicitations are pressuring response rates and acquisition costs.

Atlanticus Stock Performance

NASDAQ ATLC opened at $100.01 on Friday. The company has a market cap of $1.51 billion, a P/E ratio of 13.01 and a beta of 2.11. The company has a fifty day simple moving average of $98.04 and a 200 day simple moving average of $75.25. The company has a current ratio of 1.24, a quick ratio of 1.24 and a debt-to-equity ratio of 1.08. Atlanticus has a 12-month low of $47.50 and a 12-month high of $114.34.

Analysts Set New Price Targets

ATLC has been the topic of a number of research analyst reports. Texas Capital upgraded Atlanticus from a “hold” rating to a “strong-buy” rating in a report on Monday, July 13th. Weiss Ratings upgraded shares of Atlanticus from a “hold (c-)” rating to a “hold (c)” rating in a research report on Thursday, June 11th. Jefferies Financial Group increased their target price on shares of Atlanticus from $100.00 to $115.00 and gave the stock a “buy” rating in a research note on Wednesday, July 8th. BTIG Research lifted their price target on shares of Atlanticus from $105.00 to $179.00 and gave the company a “buy” rating in a research note on Tuesday, June 30th. Finally, William Blair set a $100.00 price objective on shares of Atlanticus in a report on Wednesday, June 10th. One research analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating and two have given a Hold rating to the company’s stock. According to MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $126.00.

Insider Buying and Selling at Atlanticus

In other news, major shareholder Frank J. Hanna III sold 15,676 shares of Atlanticus stock in a transaction dated Wednesday, July 1st. The shares were sold at an average price of $104.26, for a total transaction of $1,634,379.76. Following the completion of the transaction, the insider directly owned 259,392 shares in the company, valued at $27,044,209.92. This trade represents a 5.70% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CFO William Mccamey sold 10,000 shares of the company’s stock in a transaction dated Tuesday, June 30th. The stock was sold at an average price of $103.01, for a total transaction of $1,030,100.00. Following the completion of the sale, the chief financial officer owned 127,410 shares in the company, valued at $13,124,504.10. This represents a 7.28% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 75,000 shares of company stock valued at $7,868,627 over the last ninety days. 51.00% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of the stock. Price T Rowe Associates Inc. MD lifted its position in shares of Atlanticus by 5.5% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 9,194 shares of the credit services provider’s stock valued at $616,000 after buying an additional 478 shares during the last quarter. Jump Financial LLC raised its stake in Atlanticus by 6.1% in the 2nd quarter. Jump Financial LLC now owns 9,344 shares of the credit services provider’s stock valued at $512,000 after acquiring an additional 537 shares during the period. Advisory Services Network LLC purchased a new stake in Atlanticus during the third quarter valued at about $47,000. Bridgeway Capital Management LLC boosted its position in Atlanticus by 0.7% during the fourth quarter. Bridgeway Capital Management LLC now owns 112,147 shares of the credit services provider’s stock worth $7,508,000 after purchasing an additional 805 shares during the period. Finally, Arrowstreet Capital Limited Partnership increased its stake in shares of Atlanticus by 1.2% in the second quarter. Arrowstreet Capital Limited Partnership now owns 82,629 shares of the credit services provider’s stock worth $4,524,000 after purchasing an additional 982 shares in the last quarter. Hedge funds and other institutional investors own 14.15% of the company’s stock.

Atlanticus Company Profile

Atlanticus Holdings Corporation is a specialty financial services holding company that provides credit products and solutions to consumers across the United States. Through its subsidiaries, the company offers proprietary credit card programs, installment loan products and deposit accounts designed to serve customers who may have limited access to traditional credit. Atlanticus markets its offerings through a variety of channels, including direct?to?consumer online platforms, mail order, call centers and partnerships with retail and e-commerce businesses.

The company underwrites and services credit card portfolios under private-label and co-branded agreements, combining technology?enabled underwriting with tailored customer service.