Highlights

  • Atlanticus shows 35.18% one-year basic EPS growth, a P/E of 11.20 and PEG of 0.48.
  • Second quarter net income to common shareholders was $47,411 thousand, against $28,351 thousand.
  • Total operating revenue and other income was $744,314 thousand against $393,820 thousand.
  • Receivables reached $6,891.2 million at June 30, 2026, including $3,054.3 million from Mercury.

An undervalued growth stock pairs earnings growth with its P/E and PEG ratios, and Atlanticus (NASDAQ:ATLC) shows all three: basic earnings per share grew 35.18% over one year, the trailing twelve-month P/E ratio is 11.20 and the PEG ratio, on an expected basis, is 0.48, with shares trading at USD 90.23 on October 28, 2026, up 2.21%. Alongside those figures, the Atlanta-based financial technology company acquired Mercury on September 11, 2025, repurchased $13.6 million of its 2026 Senior Notes in the first six months of 2026, and reported second quarter 2026 net income attributable to common shareholders of $47,411 thousand.

Atlanticus Holdings Corporation is a Georgia corporation headquartered in Atlanta, Georgia. It describes itself as a financial technology company that provides technology and support services to lenders offering consumer credit to underserved Americans. Its bank partners originate private label and general purpose credit card products, and Atlanticus acquires the resulting receivables. It reports two segments, Credit as a Service (CaaS) and Auto Finance, and its Auto Finance subsidiary served 724 dealers in 34 states and two U.S. territories at June 30, 2026.

Growth: Second Quarter Earnings, Revenue and Receivables

Net income attributable to common shareholders was $47,411 thousand in the second quarter against $28,351 thousand, and $89,278 thousand for the six months against $56,297 thousand. Basic earnings per share were $3.13 against $1.87, and diluted earnings per share were $2.50 against $1.51.

Total operating revenue and other income was $744,314 thousand against $393,820 thousand, and $1,423,848 thousand for the six months against $738,693 thousand. The company said Mercury added $464.3 million to the six-month growth in that line. Receivables rose to $6,891.2 million from $3,046.5 million a year earlier, and excluding Mercury they were $3,836.9 million.

Valuation: P/E of 11.20, PEG of 0.48 and Management Commentary

The P/E ratio of 11.20 is measured on trailing twelve-month earnings, and the PEG ratio of 0.48 is on an expected basis. Total equity was $697,476 thousand at June 30, 2026, against $603,830 thousand at December 31, 2025, and retained earnings were $595,702 thousand.

On the second quarter 2026 earnings call, Chief Executive Officer Jeffrey Howard said the company expects earnings growth and returns on equity at or above its long-term targets of 20%. He said the company is earning above its return thresholds, expects to delever somewhat, and expects the return on equity to revert toward the 20% target.

Capital and Balance Sheet: Funding, Notes and Repurchases

Cash and cash equivalents were $555,215 thousand and restricted cash was $89,965 thousand at June 30, 2026. Notes payable, net, were $5,578,882 thousand and senior notes, net, were $692,117 thousand.

Near-term refinancing needs within 12 months were $166.6 million, including $122.1 million of 6.125% Senior Notes maturing November 30, 2026 and a $39.3 million revolving credit facility expiring October 2026. The company viewed imminent refunding and refinancing risks as moderate.

The company repurchased 73,004 shares of common stock for $3.8 million in the six months. The board authorized repurchases of up to 2,000,000 common shares and 500,000 Series B preferred shares through June 30, 2028. It has not paid regular cash dividends on common stock.

Disclosed Risks and Outlook: Charge-Offs, Funding Costs and Concentration

Interest expense was $123,431 thousand against $53,684 thousand. Changes in fair value of loans were a loss of $396,280 thousand against a loss of $216,777 thousand, which the company attributed largely to higher charge-offs. The combined principal net charge-off ratio, annualized, was 17.7% against 17.1% in the first quarter, and receivables 90 or more days past due were $449,382 thousand, or 6.5%.

The company disclosed that its five largest retail partners accounted for 85% of private label credit receivables. It also disclosed heavy regulation, dependence on borrowed funds and a receivables base of consumers considered less than prime. It stated that no pending legal proceedings are expected to be material.

On the call, management said the next quarter is the first with year-over-year comparisons that include Mercury and expected slightly higher delinquency and charge-off rates. The chief financial officer said delinquency rates may increase modestly as newer receivables season. In the 10-Q, the company expects growth in general purpose credit card receivables throughout 2026 and a modest increase in private label credit receivables in 2026.