Atlanticus (NASDAQ:ATLC) Announces Quarterly Earnings Results, Beats Expectations By $0.08 EPS

Key Points

• Atlanticus beat earnings expectations, reporting quarterly EPS of $2.50 versus the $2.42 consensus estimate. Second-quarter net income increased 67% year over year to $47.4 million, while revenue rose 89% to $744 million.
• The Mercury acquisition is exceeding expectations, and broader growth remains strong: legacy managed receivables rose 26%, active accounts increased by more than 1 million, and the company added a record 790,000 customers.
• Credit performance and liquidity remain solid, though management warned that delinquencies and charge-offs could rise modestly as portfolios mature. Analysts maintain a generally positive outlook, with a consensus price target of $126 versus a recent share price near $112.

Atlanticus (NASDAQ:ATLC - Get Free Report) issued its earnings results on Thursday. The credit services provider reported $2.50 earnings per share for the quarter, beating the consensus estimate 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%

ATLC stock traded up $0.48 during trading on Thursday, reaching $111.79. The company had a trading volume of 150,852 shares, compared to its average volume of 105,286. The business has a 50 day moving average of $97.22 and a 200 day moving average of $74.72. The company has a debt-to-equity ratio of 1.08, a current ratio of 1.24 and a quick ratio of 1.24. The company has a market cap of $1.69 billion, a P/E ratio of 16.69 and a beta of 2.11. Atlanticus has a 52 week low of $47.50 and a 52 week high of $114.34.

Insider Transactions at Atlanticus

In related news, CFO William Mccamey sold 10,000 shares of Atlanticus stock in a transaction that occurred 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 sale, the chief financial officer directly owned 127,410 shares in the company, valued at $13,124,504.10. The trade was a 7.28% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, major shareholder Frank J. Hanna III sold 15,676 shares of the stock in a transaction on Wednesday, July 1st. The stock was sold at an average price of $104.26, for a total value of $1,634,379.76. Following the completion of the transaction, the insider owned 259,392 shares of the company's stock, valued at approximately $27,044,209.92. This trade represents a 5.70% decrease in their position. 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 over the last quarter. Insiders own 51.00% of the company's stock.

Institutional Trading of Atlanticus

A number of hedge funds have recently modified their holdings of ATLC. Advisory Services Network LLC bought a new position in shares of Atlanticus in the 3rd quarter worth about $47,000. Jones Financial Companies Lllp bought a new stake in Atlanticus during the first quarter worth about $71,000. BNP Paribas Financial Markets grew its holdings in Atlanticus by 334.8% in the second 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 bought a new position in shares of Atlanticus during the fourth quarter valued at approximately $158,000. Finally, Franklin Resources Inc. bought a new position in shares of Atlanticus during the third quarter valued at approximately $202,000. Institutional investors own 14.15% of the company's stock.

Analysts Set New Price Targets

Several analysts have weighed in on ATLC shares. B. Riley Financial reiterated a "buy" rating on shares of Atlanticus in a research report on Thursday, May 14th. Jefferies Financial Group lifted their target price on shares of Atlanticus from $100.00 to $115.00 and gave the stock a "buy" rating in a research note on Wednesday, July 8th. William Blair set a $100.00 price target on shares of Atlanticus in a report on Wednesday, June 10th. Texas Capital raised shares of Atlanticus from a "hold" rating to a "strong-buy" rating in a report on Monday, July 13th. Finally, Capital One Financial set a $144.00 price objective on shares of Atlanticus in a research note on Monday, July 13th. One research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and two have assigned a Hold rating to the stock. Based on data from MarketBeat, Atlanticus has an average rating of "Moderate Buy" and a consensus target price of $126.00.

Atlanticus Company Profile

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.

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