Is Atlanticus (ATLC) the Cheapest Winner in the Stock Market Today?

The credit industry has been killing it lately … Right now, we’ve got our eye on this under-the-radar play.

Atlanticus Holdings (NASDAQ: ATLC) is a consumer lender that specializes in serving underbanked customers. The company maintains a relatively wide suite of offerings, covering credit cards, auto loans, healthcare loans, and consumer credit.

Why does the stock deserve a closer look? First and foremost, capital appreciation — in the last 365 days, the price of Atlanticus Holdings stock has increased by 71.06%.

At the time of writing, ATLC was changing hands at a price of $51.90. On March 10, Atlanticus shares reached a year-to-date (YTD) low of $42.79. The cause was quite simple — investors got cold feet ahead of the company’s Q4 and FY 2024 earnings call, held on March 13.

Despite those doubts, the quarterly report turned out to be a success, and although the price of ATLC is on the rebound, it still hasn’t fully recovered.

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Let’s cut to the chase — quite a few metrics suggest that taking advantage of this dip might prove to be a wise choice. Atlanticus Holdings stock carries an overall Zen Rating of A — and stocks with this distinction have provided an average annual return of 32.52% since the early 2000s. In 2024, ATLC provided a return of 48.03% — roughly one and a half times as much as the already high average of the stocks in its class.

As impressive as that is, it is in the past — the most germane question at the moment is whether or not that level of outperformance is something that can be maintained. I believe it can — and here’s why.

Atlanticus Holdings has managed to notch 8 earnings beats in a row. With that impressive feat in mind (as well as the strong upward trajectory prices have been on), it comes as little wonder that the stock ranks highly in terms of its Momentum Component Grade rating. In this particular category, ATLC ranks in the top 4% of the more than 4,600 equities that our Zen Rating system tracks.

The stock also ranks quite high in terms of Sentiment and Financials, in the top 15% and 20%, respectively. However, there’s a very interesting ace up ATLC’s sleeve — and that is its Artificial Intelligence rating.

In our Zen Ratings system, a stock’s AI rating is derived from the findings of a neural network trained on more than 20 years of technical and fundamental data. By detecting subtle patterns that, in a practical sense, would simply require too much legwork from an analyst, this metric points to a higher likelihood of outperformance. Here’s how to use the AI Component Grade to locate smarter investments.

ATLC ranks in the top 4% of stocks we track for the AI Component.

Finally, at present, the stock is quite a bargain, as its price-to-earnings (P/E) ratio stands at just 8.92x, far below the credit service industry average of 29.84x and the market-wide average of 32.57x. 

The company’s revenues are forecast to grow at a pretty staggering rate of 261.67% annually, but pretty soon, we won’t have to speculate as to how realistic that mark is, as Atlanticus Holdings will hold its next earnings call on May 9.

—> Click here to research ATLC

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