Atlanticus Holdings (ATLC) AI Stock Analysis

• Market Cap: $777.38M
• Dividend Yield: N/A
• Average Volume (3M): 65.09K
• Price to Earnings (P/E): 10.8
• Beta (1Y): 1.75
• Revenue Growth: 13.46%
• EPS Growth: 10.43%
• Country: US
• Employees: 417
• Sector: Financial
• Sector Strength: 76
• Industry: Financial - Credit Services
• EPS (TTM): 1.42
• Shares Outstanding: 15,115,344
• 10 Day Avg. Volume: 65,965
• 30 Day Avg. Volume: 65,087
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.91
• Price to Cash Flow (P/CF): 1.60
• P/FCF Ratio: 1.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $71.33
• Price Target Upside: 34.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Atlanticus Holdings demonstrates strong financial performance with robust revenue growth and cash flow. However, profitability margins and high leverage remain concerns. The technical indicators are mixed, and the valuation suggests reasonable pricing. The stock is well-positioned for growth, but caution is advised due to its leverage.

Positive Factors

Growth Opportunities

Atlanticus has a visible pathway to doubling its portfolio within the next 1-2 years, while expanding its risk-adjusted margins and profitability.

Partnerships

The partnership with Synchrony Financial is gaining traction and performing above expectations, increasing confidence in the agreement.

Valuation

The valuation of ATLC is seen as attractive with a P/E multiple that is cheaper than peers, despite rapid growth and improving credit trends.

Negative Factors

Cost of Living

The cost of living remains high, with rent, gas, and food continuing to constrain borrowers’ household savings and liquidity.

Earnings Outlook

The price target is being lowered from $75 to $72 due to a reduction in the target multiple on future EPS, reflecting recent contraction in market and peer valuations.

Atlanticus Holdings Business Overview & Revenue Model

Company Description

Atlanticus Holdings Corporation provides credit and related financial services and products to customers the United States. It operates in two segments, Credit as a Service, and Auto Finance. The Credit as a Service segment originates a range of consumer loan products, such as private label and general purpose credit cards originated by lenders through various channels, including retail and healthcare, direct mail solicitation, digital marketing, and partnerships with third parties; and offers credit to their customers for the purchase of various goods and services, including consumer electronics, furniture, elective medical procedures, healthcare, educational services, and home-improvements by partnering with retailers and service providers. In addition, it offers loan servicing, such as risk management and customer service outsourcing for third parties; and engages in testing and investment activities in consumer finance technology platforms. The Auto Finance segment purchases and/or services loans secured by automobiles from or for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, and used car business. This segment also provides floor plan financing and installment lending products. Further, the company invests in and services portfolios of credit card receivables. Atlanticus Holdings Corporation was founded in 1996 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

Atlanticus Holdings makes money through its diverse portfolio of credit-related financial products. The company generates revenue primarily from interest and fees associated with its credit card and loan products, which are offered to consumers who may have limited access to traditional credit sources. Additionally, Atlanticus collaborates with various retail and financial partners to offer consumer credit solutions, enhancing its reach and potential customer base. The company also benefits from its proprietary technology platform, which helps manage credit risk and optimize customer acquisition and retention, contributing to its overall earnings.

Atlanticus Holdings Financial Statement Overview

Summary

Atlanticus Holdings has shown impressive revenue growth and strong cash flow, but with decreasing profitability margins and high leverage. Improvements in equity ratio provide reassurance.

Income Statement

Atlanticus Holdings has demonstrated significant growth in its total revenue, with a noticeable increase from $292.6M in 2022 to $1.31B in 2024. The gross profit margin remains strong, indicating efficient cost management. However, the net profit margin has decreased over time, reflecting potential challenges in maintaining profitability despite higher revenues. EBIT and EBITDA margins have also declined, suggesting increased operational costs or reduced pricing power.

Balance Sheet

The company's debt-to-equity ratio indicates a high level of leverage, with total debt significantly exceeding stockholders' equity. Despite this, the equity ratio has improved over the years, reflecting increased shareholder equity relative to total assets. Return on equity (ROE) has shown variability, indicating potential fluctuations in profitability. The balance sheet shows a strong cash position, enhancing liquidity.

Cash Flow

Operating cash flow has been consistently strong, supporting robust free cash flow figures. The free cash flow to net income ratio is favorable, indicating efficient cash generation relative to earnings. However, the high investing cash outflows could pose a risk if not carefully managed, suggesting significant reinvestment into the business or acquisitions.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
299.40M	1.16B	292.56M	399.80M	340.27M
	Gross Profit
249.26M	1.05B	248.69M	361.57M	307.79M
	EBIT
1.49M	257.85M	207.03M	219.69M	114.59M
	EBITDA
0.00	241.94M	0.00	0.00	0.00
	Net Income Common Stockholders
87.37M	102.84M	135.60M	177.90M	94.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
499.64M	383.65M	384.98M	409.66M	178.10M
	Total Assets
3.27B	2.71B	2.39B	1.94B	1.21B
	Total Debt
2.22B	2.03B	1.82B	1.43B	923.69M
	Net Debt
1.72B	1.64B	1.43B	1.02B	745.59M
	Total Liabilities
2.78B	2.17B	2.02B	1.62B	1.09B
	Stockholders Equity
492.91M	434.68M	366.41M	328.00M	117.28M
Cash Flow		Free Cash Flow
469.40M	455.32M	341.28M	205.28M	211.99M
	Operating Cash Flow
469.40M	459.32M	346.13M	212.37M	212.73M
	Investing Cash Flow
-747.03M	-672.20M	-680.78M	-475.02M	-292.57M
	Financing Cash Flow
393.61M	163.34M	261.25M	510.33M	162.38M

Atlanticus Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 52.97
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATLC, the sentiment is Positive. The current price of 52.97 is above the 20-day moving average (MA) of 50.82, above the 50-day MA of 51.92, and above the 200-day MA of 45.50, indicating a bullish trend. The MACD of 0.27 indicates Negative momentum. The RSI at 54.06 is Neutral, neither overbought nor oversold. The STOCH value of 73.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ATLC.

Atlanticus Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YRD	84 Outperform	$490.05M	2.23	17.96%	3.21%	17.07%	-8.81%
ATLC	80 Outperform	$777.38M	10.78	23.00%	―	13.46%	10.43%
WRLD	79 Outperform	$737.87M	9.09	19.28%	―	-2.78%	24.39%
RM	74 Outperform	$324.24M	7.80	12.14%	3.82%	6.73%	151.08%
NRDS	73 Outperform	$648.08M	21.49	8.32%	―	14.71%	―
Sector *	63 Neutral	$12.07B	9.35	8.15%	79.57%	12.85%	-5.13%
PRAA	60 Neutral	$679.96M	9.64	6.13%	―	39.47%	―