Atlanticus Holdings Corp. (ATLC) PT Raised to $54 at BTIG

BTIG analyst Vincent Caintic raised the price target on Atlanticus Holdings Corp. (NASDAQ: ATLC) to $54.00 (from $45.00) while maintaining a Buy rating.

The analyst comments "WHAT YOU SHOULD KNOW: Atlanticus continues to fire on all cylinders, with performance metrics across the board improving q/q and y/y and in contrast with many of the prime credit card peers. Purchase volume was up 16% y/y and 12% q/q and loan growth was up 12% y/y and 7% q/q. This was at the same time that principal NCOs declined 30bps y/y and 380bps q/q, and 30+ day delinquencies declined 160bps y/y and 60bps q/q. Perhaps the only criticism is NIM that compressed 180bps q/q though expanded 120bps q/q, and we attribute this to Atlanticus taking more market share in the prime/near-prime space. Our optimism on Atlanticus's potential loan growth continues. The 16% y/y growth in sales and 12% y/y growth in loan receivables was even without the partnership with Synchrony (SYF, Neutral), as the partner relationships only started in October 2024. Growth this quarter was driven by increasing penetration at Atlanticus's large merchant relationships; we expect this will play an even bigger role during the 4Q24 holiday sales season, as merchants fill holes left by prime lenders that have tightened credit underwriting. We expect the Synchrony upside will begin showing by 2Q25, as Atlanticus executes on integrating the merchant pipeline from Synchrony. The "Trump Trade" impact of less regulation should help Atlanticus, and we've seen the trade play through with ATLC's 24% rise in shares in the past month. As of now however, Atlanticus continues to operate with the assumption of an $8 late fee; the only change is to Atlanticus's fair value assumptions that now delay the CFPB Late Fee rule implementation date. Atlanticus is 80% through with its Change in Terms to clients, and there has been little pushback from consumers and merchants. Though we frequently get the investor question about ATLC and the point of sale credit cards "over-earning", we think Atlantincus and others will be successful in resetting the new baseline economics higher, especially as inflation and other costs have increased. The CFPB spurred the economic discussion with merchants, but these relationship discussions are comprehensive and broader than the impact of the late fee removal."

You May Also Be Interested In

• Fiserv (FISV) PT Lowered to $60 at Freedom Broker
• Jefferies on Five Below (FIVE): 'Our latest channel checks reinforce our view that FIVE's momentum extends well beyond viral Squish trends'
• Cantor Fitzgerald Reiterates Overweight Rating on Applied Materials (AMAT)