Atlanticus (NASDAQ:ATLC) Announces Earnings Results

Atlanticus (NASDAQ:ATLC) issued its quarterly earnings results on Thursday. The credit services provider reported $3.00 EPS for the quarter, topping analysts’ consensus estimates of $2.99 by $0.01, Zacks reports. Atlanticus had a return on equity of 25.17% and a net margin of 5.80%. The business had revenue of $775.85 million during the quarter, compared to analysts’ expectations 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 Price Performance

Shares of NASDAQ ATLC traded down $5.66 during mid-day trading on Friday, reaching $90.80. The company’s stock had a trading volume of 118,665 shares, compared to its average volume of 110,412. The firm has a market capitalization of $1.38 billion, a PE ratio of 11.78 and a beta of 1.80. 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 stock has a fifty day moving average of $92.32 and a two-hundred day moving average of $80.93. Atlanticus has a 52 week low of $47.50 and a 52 week high of $114.34.

Analysts Set New Price Targets

A number of research analysts recently issued reports on ATLC shares. Wall Street Zen upgraded Atlanticus from a “buy” rating to a “strong-buy” rating in a research note on Sunday, October 11th. HSBC set a $144.00 target price on shares of Atlanticus in a research note on Monday, July 13th. Citigroup reaffirmed an “outperform” rating on shares of Atlanticus in a report on Thursday, July 16th. Texas Capital upgraded shares of Atlanticus from a “hold” rating to a “strong-buy” rating in a research report on Monday, July 13th. Finally, Weiss Ratings reissued a “hold (c)” rating on shares of Atlanticus in a research note on Tuesday, September 8th. One analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat, Atlanticus presently has an average rating of “Moderate Buy” and an average price target of $124.86.

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.