Strength Seen in Atlanticus (ATLC): Can Its 5.5% Jump Turn into More Strength?

Atlanticus Holdings Corporation (ATLC) shares soared 5.5% in the last trading session to close at $76.15. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 17.6% gain over the past four weeks.

Atlanticus stock witnessed a price rise, which might be the result of B. Riley’s move of increasing the target price of the stock. Recently, ATLC purchased Mercury Financial LLC, a leading tech-driven credit card platform serving near-prime consumers in the United States. The deal enhances Atlanticus’ suite of credit programs, expands its reach and is expected to drive value through portfolio optimization, cost synergies, increased originations and new growth opportunities in marketing and product expansion.

Besides, Atlanticus’ competitive strengths lie in its proprietary fintech platform, advanced data analytics, and machine learning capabilities, which empower inclusive credit solutions for underserved consumers. With more than 25 years of experience, it provides flexible, paperless and instant decisioning platforms to bank partners, enabling customized credit offerings at scale across diverse retail and healthcare sectors, thereby ensuring strong, recurring revenues and deep market penetration.

This company is expected to post quarterly earnings of $1.49 per share in its upcoming report, which represents a year-over-year change of +17.3%. Revenues are expected to be $388.81 million, up 10.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Atlanticus, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ATLC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Atlanticus is a member of the Zacks Financial - Miscellaneous Services industry. One other stock in the same industry, WisdomTree, Inc. (WT), finished the last trading session 3% lower at $13.9. WT has returned 6.9% over the past month.

For WisdomTree, Inc., the consensus EPS estimate for the upcoming report has changed -1.6% over the past month to $0.2. This represents a change of +11.1% from what the company reported a year ago. WisdomTree, Inc. currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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