Atlanticus (NASDAQ:ATLC) Posts Earnings Results, Beats Estimates By $0.08 EPS

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

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 Trading Up 0.4%

Shares of NASDAQ:ATLC traded up $0.48 during mid-day trading on Thursday, reaching $111.79. The stock had a trading volume of 150,852 shares, compared to its average volume of 166,062. The firm has a 50 day simple moving average of $97.77 and a two-hundred day simple moving average of $75.08. Atlanticus has a twelve month low of $47.50 and a twelve month high of $114.34. The firm has a market cap of $1.69 billion, a PE ratio of 16.69 and a beta of 2.11. The company has a current ratio of 1.24, a quick ratio of 1.24 and a debt-to-equity ratio of 1.08.

Analysts Set New Price Targets

A number of brokerages have recently issued reports on ATLC. B. Riley Financial reiterated a “buy” rating on shares of Atlanticus in a research report on Thursday, May 14th. Capital One Financial set a $144.00 price target on shares of Atlanticus in a report on Monday, July 13th. Zacks Research lowered shares of Atlanticus from a “strong-buy” rating to a “hold” rating in a report on Monday, July 13th. Wall Street Zen upgraded shares of Atlanticus from a “buy” rating to a “strong-buy” rating in a research report on Sunday, July 5th. Finally, Weiss Ratings raised Atlanticus from a “hold (c-)” rating to a “hold (c)” rating in a report on Thursday, June 11th. One analyst has rated the stock with a Strong Buy rating, five have given a Buy rating and two have assigned a Hold rating to the stock. According to MarketBeat, Atlanticus presently has a consensus rating of “Moderate Buy” and an average price target of $126.00.

Insider Activity

In other Atlanticus news, CEO Jeffrey A. Howard sold 10,000 shares of the stock in a transaction on Tuesday, June 30th. The shares were sold at an average price of $103.01, for a total value of $1,030,100.00. Following 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 document filed with the SEC, which is accessible through the SEC website. Also, CFO William Mccamey sold 10,000 shares of Atlanticus 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 transaction, the chief financial officer directly owned 127,410 shares in the company, valued at approximately $13,124,504.10. This represents a 7.28% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 75,000 shares of company stock worth $7,868,627 in the last ninety days. Company insiders own 51.00% of the company’s stock.

Institutional Trading of Atlanticus

Large investors have recently made changes to their positions in the company. Wellington Management Group LLP increased its holdings in shares of Atlanticus by 54.7% in the fourth quarter. Wellington Management Group LLP now owns 704,282 shares of the credit services provider’s stock worth $47,152,000 after acquiring an additional 249,100 shares in the last quarter. Bridgeway Capital Management LLC raised its position in shares of Atlanticus by 133.5% during the second quarter. Bridgeway Capital Management LLC now owns 93,234 shares of the credit services provider’s stock worth $5,105,000 after purchasing an additional 53,312 shares during the period. AQR Capital Management LLC bought a new position in shares of Atlanticus during the 1st quarter valued at about $1,083,000. Charles Schwab Investment Management Inc. lifted its holdings in shares of Atlanticus by 42.3% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 65,155 shares of the credit services provider’s stock valued at $4,362,000 after purchasing an additional 19,357 shares in the last quarter. Finally, Vanguard Group Inc. grew its position in shares of Atlanticus by 6.7% in the 3rd quarter. Vanguard Group Inc. now owns 305,772 shares of the credit services provider’s stock valued at $17,912,000 after purchasing an additional 19,159 shares during the period. Institutional investors own 14.15% of the company’s stock.

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.