Atlanticus (NASDAQ:ATLC) Releases Earnings Results

Atlanticus (NASDAQ:ATLC) announced its earnings results on Thursday. The credit services provider reported $4.87 earnings per share for the quarter, topping analysts’ consensus estimates of $2.99 by $1.88, FiscalAI reports. Atlanticus had a net margin of 5.80% and a return on equity of 25.17%. The company had revenue of $775.85 million during the quarter, compared to the consensus estimate of $775.08 million.

Here are the key takeaways from Atlanticus’ conference call:

• Atlanticus reported record operating results, with adjusted diluted EPS of $3 and adjusted return on average equity of 30%, above its 20% goal. Reported diluted EPS was $4.87, including $1.87 from one-time transaction-related gains.
• Growth remained strong beyond Mercury: management estimated top-line growth of nearly 20% excluding the acquisition. Managed receivables rose 8% year over year to $7.1 billion, supported by record originations and growth in both retail and general-purpose credit.
• Credit performance was stable, with the combined principal net charge-off ratio easing to 17.3% from 17.7% in the prior quarter. Management said Mercury’s back book and new originations were performing better than modeled.
• Management expects portfolio-wide customer acquisition costs to keep rising, citing greater spending on higher-cost channels and a growing share of general-purpose credit. It also expects delinquencies to increase marginally as partner offerings reach a broader range of consumers.
• The company sold its CAR auto finance operations for about $71.2 million and the Mercury word mark and related intellectual property for $27.5 million. Management said it plans to direct the proceeds toward higher-growth, higher-return businesses; the Mercury credit card portfolio was not part of the IP sale and will be rebranded over time.

Atlanticus Trading Down 3.3%

Shares of ATLC stock traded down $3.30 during trading hours on Thursday, reaching $96.45. The company had a trading volume of 151,913 shares, compared to its average volume of 98,907. The company has a 50 day moving average of $92.32 and a 200 day moving average of $80.93. The company has a debt-to-equity ratio of 0.99, a current ratio of 1.26 and a quick ratio of 1.26. The firm has a market cap of $1.46 billion, a price-to-earnings ratio of 12.54 and a beta of 1.80. Atlanticus has a 1-year low of $47.50 and a 1-year high of $114.34.

Analyst Ratings Changes

Several analysts have recently commented on the stock. Zacks Research cut shares of Atlanticus from a “strong-buy” rating to a “hold” rating in a research note on Monday, July 13th. BTIG Research restated a “buy” rating and issued a $179.00 price objective on shares of Atlanticus in a research report on Tuesday, September 22nd. Texas Capital raised Atlanticus from a “hold” rating to a “strong-buy” rating in a report on Monday, July 13th. Capital One Financial set a $144.00 price objective on Atlanticus in a report on Monday, July 13th. Finally, Jefferies Financial Group increased their price objective on Atlanticus from $100.00 to $115.00 and gave the company a “buy” rating in a research report on Wednesday, July 8th. One research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and two have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, Atlanticus currently has a consensus rating of “Moderate Buy” and an average target price of $129.00.

Atlanticus Company Profile

Atlanticus Holdings Corporation is a financial technology and services company that provides credit and related financial products to consumers, primarily in the United States. Through its subsidiaries, the company focuses on serving consumers who may have limited access to traditional forms of credit.

Atlanticus operates businesses offering private-label and general-purpose credit products, including credit cards and installment loans. Its offerings are distributed through direct-to-consumer channels and partnerships with merchants, giving consumers access to financing for purchases and other personal needs.

The company also operates an auto finance business that provides vehicle-related lending solutions.