Market Overview - The stock market has shown a rebound from recent lows, driven by cautious optimism regarding potential trade deals from the Trump administration [1] - Wall Street is awaiting significant tariff updates and earnings reports from major tech companies, with investors focused on the impact of tariffs on corporate performance [2] Investment Strategy - Investors are encouraged to remain invested to capitalize on potential market rallies, as time in the market often yields better results than attempting to time the market [3] - There are numerous attractive value stocks available for investment, particularly for those who know how to identify them [4] Stock Screening Methodology - A screening method is employed to identify top value stocks, focusing on Zacks Rank 1 (Strong Buys) or 2 (Buys) [6] - The screening criteria include P/E ratios under the industry median, P/S ratios under the industry median, and quarterly earnings rates above the industry median [10] Featured Stock: Atlanticus Holdings Corporation (ATLC) - Atlanticus Holdings Corporation is a financial technology company that provides credit and financial services to underserved consumers and businesses [11] - The company has experienced significant revenue growth, increasing from $78 million in 2015 to a projected $1.5 billion by 2026 [12] - ATLC is expected to see earnings growth of 29% in 2025 and 20% in 2026, with a Zacks Rank 2 (Buy) due to positive EPS revisions [13] - Over the past 12 months, ATLC shares have surged 105%, outperforming the S&P 500 and finance sector, and currently trades at a 50% discount to its sector [14]

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Atlanticus Holdings Corporation (ATLC) , which belongs to the Zacks Financial - Miscellaneous Services industry.This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 10.30%.For the most recent quarter, Atlanticus was expected to post earnings o ...

Core Viewpoint - Atlanticus Holdings Corporation (ATLC) shows potential for significant upside, with a mean price target of $66.43 indicating a 29.9% increase from the current price of $51.15 [1] Price Targets and Analyst Consensus - The average price target for ATLC ranges from a low of $45 to a high of $90, with a standard deviation of $14.60, indicating variability in analyst estimates [2] - The lowest estimate suggests a 12% decline, while the highest points to a 76% upside, highlighting the differing opinions among analysts [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Analyst Optimism - Analysts have shown increasing optimism about ATLC's earnings prospects, with a positive trend in earnings estimate revisions [11] - Over the last 30 days, two estimates have been revised higher, leading to a 7.9% increase in the Zacks Consensus Estimate for the current year [12] - ATLC holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors [13]

Core Insights - Atlanticus Holdings Corporation (ATLC) reported quarterly earnings of $1.42 per share, exceeding the Zacks Consensus Estimate of $1.21 per share, and up from $1.10 per share a year ago, representing an earnings surprise of 17.36% [1] - The company posted revenues of $353.19 million for the quarter ended December 2024, which was slightly below the Zacks Consensus Estimate by 0.85%, but an increase from $308.6 million year-over-year [2] - Atlanticus has surpassed consensus EPS estimates in all four of the last quarters, while it has topped consensus revenue estimates twice in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.11 on revenues of $351.66 million, and for the current fiscal year, it is $5.60 on revenues of $1.47 billion [7] - The estimate revisions trend for Atlanticus is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which Atlanticus belongs, is currently ranked in the top 15% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - Atlanticus Holdings Corporation reported strong financial results for the fourth quarter and full year ended December 31, 2024, highlighting significant growth in net margin and managed receivables despite various economic challenges [1][3]. Financial and Operating Highlights - Fourth quarter 2024 net margin grew by 28.0% compared to the prior year, reaching $117.5 million [4][18]. - Total operating revenue and other income increased by 14.4% to $353.2 million for the fourth quarter [4][9]. - Managed receivables rose by 13.0% to $2.7 billion, with over $313.5 million in net receivables growth [4][6]. - The company served 3.7 million accounts, with 368,000 new accounts added during the quarter [4][6]. Management Commentary - The CEO expressed pride in the company's ability to achieve return on capital targets while navigating disruptions such as the pandemic and inflation [3]. - Over the past five years, managed receivables grew at a compounded annual growth rate of 24%, revenue by 31%, and earnings by 29% [3]. Revenue Breakdown - Consumer loans, including past due fees, contributed $251.7 million to total revenue for the quarter [27]. - Fees and related income on earning assets amounted to $83.8 million [27]. - Other revenue sources totaled $17.7 million [27]. Interest Expense and Debt - Interest expense for the fourth quarter was $44.7 million, a 36.9% increase from the previous year, driven by higher outstanding debt and borrowing costs [10][11]. - Outstanding notes payable increased to $2.16 billion as of December 31, 2024, from $1.80 billion a year earlier [11]. Changes in Fair Value of Loans - Changes in fair value of loans were reported at $184.3 million for the fourth quarter, slightly up from $184.1 million in the prior year [12]. Operating Expenses - Total operating expenses rose by 27.0% to $77.6 million, primarily due to increased servicing costs and inflationary pressures [14]. - Salaries and benefits accounted for a significant portion of the operating expenses, totaling $12.6 million for the quarter [27]. Net Income - Net income attributable to common shareholders increased by 31.7% to $26.3 million, or $1.42 per diluted share [18][27].

Collection Strategies - The company employs various collection strategies, including reducing or eliminating contractual interest and waiving fees based on payment history, to improve collections and customer service [46]. - Collection strategies are regularly monitored and adjusted based on customer satisfaction, delinquency rates, expected losses, and costs to collect, leading to better collection experiences and lower bad debt losses [49]. - Accounts that are 90 days or more past due are placed on non-accrual status, which may result in reduced interest and fees if certain payment conditions are met [54]. - The company utilizes re-aging techniques for accounts that meet specific criteria, potentially delaying or reducing delinquencies and charge-offs by less than 10% and 5%, respectively [52]. - The company has over 25 years of experience in customer service and collections, which helps mitigate credit and payment risks [336][341]. Workforce and Employment - The company has 417 employees as of December 31, 2024, with an average tenure of over 11 years, indicating a stable workforce [63]. Competition and Market Environment - The auto finance segment faces competition from both national and regional companies, as well as smaller private firms, creating a fragmented market [62]. - The company faces substantial competition from financial service and fintech companies, impacting its financial performance based on the performance of investments in receivables [61]. Credit Loss and Financial Risks - The company establishes an allowance for credit losses based on loan performance, delinquency data, and economic trends, which could materially affect operations if actual results differ from estimates [331]. - A 10% increase in credit loss rates could result in a pre-tax earnings loss of $88.2 million, while a decrease could yield a gain of $88.2 million [337]. - The company is exposed to market return risk through loans, interest, and fees receivable, which are measured at fair value using a discounted cash flow methodology [338][339]. Interest Rate Risk - The company has $407.5 million in notes payable subject to interest rate risk, with a potential pre-tax earnings impact of $(4.1) million if interest rates increase by 100 basis points [335]. - The Auto Finance segment's loans receivable are fixed rate amortizing loans, exposing the company to interest rate risks due to structured financing facilities priced over floating rate benchmarks [334]. - The company mitigates interest rate risk by maintaining the majority of its debt facilities at fixed interest rates [333]. - The fair value of loans at December 31, 2024, is estimated at $2,630.3 million, with a potential impact of $(56.6) million on pre-tax earnings if discount rates increase by 10% [340]. - A 10% change in payment rates could lead to a pre-tax earnings impact of $201.5 million if rates increase, and $(201.5) million if they decrease [342]. - Total borrowings associated with loans at fair value and amortized cost amount to $2.2 billion as of December 31, 2024 [343]. Sensitivity Analysis - The sensitivity analysis assumes an immediate hypothetical change in market interest rates and credit loss rates, indicating potential volatility in earnings [335][337].

Core Insights - Atlanticus Holdings Corporation (ATLC) has consistently surpassed earnings estimates, averaging a beat of 8.52% over the last two quarters [1][2] - The most recent earnings report showed earnings of $1.27 per share, exceeding the Zacks Consensus Estimate of $1.23 per share by 3.25% [2] - The previous quarter also saw a positive surprise, with actual earnings of $0.99 per share against an expected $0.87 per share, resulting in a 13.79% surprise [2] Earnings Estimates and Predictions - Estimates for Atlanticus have been trending higher, supported by its history of earnings surprises [3] - The stock currently has a positive Zacks Earnings ESP of +4.67%, indicating bullish sentiment among analysts regarding its earnings prospects [6] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a strong possibility of another earnings beat [6] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [4] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [5] - A negative Earnings ESP does not necessarily indicate an earnings miss, but it does reduce predictive power [6]

Core Viewpoint - Atlanticus Holdings Corporation (ATLC) has experienced a significant increase in stock price, attributed to its competitive strengths and positive earnings expectations [1][2][4]. Company Overview - Atlanticus specializes in providing credit to consumers underserved by traditional financial institutions, particularly those with lower FICO scores [3]. - The company leverages over 25 years of experience in consumer loan servicing, utilizing advanced technology and predictive analytics to enhance its offerings [2][3]. Financial Performance - The upcoming quarterly earnings report is expected to show earnings of $1.21 per share, reflecting a year-over-year increase of 10% [4]. - Revenue projections stand at $356.22 million, indicating a 15.4% growth compared to the same quarter last year [4]. Market Sentiment - The consensus EPS estimate for Atlanticus has been revised 3.4% higher in the last 30 days, suggesting a positive trend that may lead to stock price appreciation [5]. - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook in the market [5]. Industry Context - Atlanticus is part of the Zacks Financial - Miscellaneous Services industry, which includes other companies like MidCap Financial Investment (MFIC) [5]. - MFIC's EPS estimate has remained unchanged, with a year-over-year decline of 10.9%, and it currently holds a Zacks Rank of 2 (Buy) [6].

Core Insights - The article emphasizes the importance of value investing, highlighting the strategy of identifying undervalued companies in the market [2] - Zacks has developed a Style Scores system to help investors find stocks with specific traits, particularly focusing on the "Value" category [3] - Atlanticus (ATLC) is presented as a strong value stock, currently holding a Zacks Rank of 2 (Buy) and a Value grade of A [4] Valuation Metrics - Atlanticus has a P/E ratio of 8.01, significantly lower than the industry average of 16.52, indicating potential undervaluation [4] - The company's P/B ratio stands at 1.51, compared to the industry's average of 3.30, suggesting a solid market value relative to its book value [5] - Atlanticus's P/CF ratio is 6.87, which is attractive against the industry's average of 16.96, reflecting a favorable cash flow outlook [6] Investment Outlook - The metrics indicate that Atlanticus is likely undervalued, and combined with a strong earnings outlook, it is considered a great value stock at the moment [7]

Group 1: Earnings Performance - Atlanticus Holdings Corporation (ATLC) reported quarterly earnings of $1.27 per share, exceeding the Zacks Consensus Estimate of $1.23 per share, and up from $1.03 per share a year ago, representing an earnings surprise of 3.25% [1] - The company posted revenues of $350.95 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 7.44%, compared to year-ago revenues of $294.91 million [2] - Over the last four quarters, Atlanticus has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Atlanticus shares have increased by approximately 8% since the beginning of the year, while the S&P 500 has gained 24.3% [3] - The company's earnings outlook will be crucial for future stock movements, with current consensus EPS estimates for the coming quarter at $1.22 and $4.54 for the current fiscal year [4][7] - The estimate revisions trend for Atlanticus is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Financial - Miscellaneous Services industry, to which Atlanticus belongs, is currently in the top 31% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]