Atlanticus (NASDAQ:ATLC) Issues Earnings Results

Atlanticus (NASDAQ:ATLC) released its quarterly earnings results on Thursday. The credit services provider reported $2.50 earnings per share for the quarter, topping the consensus estimate of $2.42 by $0.08, Zacks reports. Atlanticus had a net margin of 5.86% and a return on equity of 23.43%.

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 Price Performance

Shares of NASDAQ ATLC traded up $0.48 during mid-day trading on Thursday, hitting $111.79. 150,852 shares of the company’s stock traded hands, compared to its average volume of 105,286. The company has a debt-to-equity ratio of 1.08, a current ratio of 1.24 and a quick ratio of 1.24. Atlanticus has a 1 year low of $47.50 and a 1 year high of $114.34. The company has a market capitalization of $1.69 billion, a P/E ratio of 16.69 and a beta of 2.11. The company’s 50-day moving average is $97.22 and its two-hundred day moving average is $74.72.

Insider Activity at Atlanticus

In other Atlanticus news, CEO Jeffrey A. Howard sold 10,000 shares of the stock in a transaction dated Tuesday, June 30th. The stock was sold at an average price of $103.01, for a total value of $1,030,100.00. Following the completion of the sale, the chief executive officer directly owned 663,265 shares in the company, valued at approximately $68,322,927.65. This trade represents a 1.49% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, CFO William Mccamey sold 10,000 shares of the stock in a transaction on 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. The trade was a 7.28% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders have sold 75,000 shares of company stock valued at $7,868,627. Company insiders own 51.00% of the company’s stock.

Institutional Investors Weigh In On Atlanticus

A number of institutional investors have recently added to or reduced their stakes in ATLC. Advisory Services Network LLC acquired a new position in shares of Atlanticus during the third quarter valued at approximately $47,000. Jones Financial Companies Lllp purchased a new stake in shares of Atlanticus during the 1st quarter valued at approximately $71,000. BNP Paribas Financial Markets grew its holdings in shares of Atlanticus by 334.8% during the 2nd quarter. BNP Paribas Financial Markets now owns 1,735 shares of the credit services provider’s stock worth $95,000 after purchasing an additional 1,336 shares during the period. State of Wyoming acquired a new stake in shares of Atlanticus during the fourth quarter worth about $158,000. Finally, Zacks Investment Management purchased a new position in shares of Atlanticus in the 4th quarter valued at about $220,000. Institutional investors and hedge funds own 14.15% of the company’s stock.

Analyst Upgrades and Downgrades

Several analysts have issued reports on the company. Capital One Financial set a $144.00 price target on Atlanticus in a report on Monday, July 13th. B. Riley Financial reaffirmed a “buy” rating on shares of Atlanticus in a research report on Thursday, May 14th. Wall Street Zen upgraded Atlanticus from a “buy” rating to a “strong-buy” rating in a research note on Sunday, July 5th. 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 report on Wednesday, July 8th. Finally, William Blair set a $100.00 target price on shares of Atlanticus in a research note on Wednesday, June 10th. One investment analyst has rated the stock with a Strong Buy rating, five have given a Buy rating and two have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $126.00.

About Atlanticus

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.