Intrinsic value of Atlanticus Holdings - ATLC

Previous Close

$2.30

  Intrinsic Value

$68.38

stock screener

  Rating & Target

str. buy

+999%

Previous close

$2.30

 
Intrinsic value

$68.38

 
Up/down potential

+999%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as ATLC.

We calculate the intrinsic value of ATLC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -13.82
  37.50
  34.25
  31.33
  28.69
  26.32
  24.19
  22.27
  20.54
  18.99
  17.59
  16.33
  15.20
  14.18
  13.26
  12.43
  11.69
  11.02
  10.42
  9.88
  9.39
  8.95
  8.56
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
Revenue, $m
  106
  146
  196
  257
  331
  418
  519
  634
  765
  910
  1,070
  1,245
  1,434
  1,637
  1,854
  2,085
  2,329
  2,585
  2,855
  3,137
  3,431
  3,738
  4,058
  4,391
  4,737
  5,097
  5,470
  5,859
  6,262
  6,682
  7,118
Variable operating expenses, $m
 
  29
  39
  51
  65
  83
  103
  126
  151
  180
  212
  246
  284
  324
  367
  413
  461
  512
  565
  621
  679
  740
  804
  869
  938
  1,009
  1,083
  1,160
  1,240
  1,323
  1,409
Fixed operating expenses, $m
 
  100
  103
  106
  108
  111
  114
  116
  119
  122
  125
  129
  132
  135
  138
  142
  145
  149
  153
  157
  161
  165
  169
  173
  177
  182
  186
  191
  196
  201
  206
Total operating expenses, $m
  118
  129
  142
  157
  173
  194
  217
  242
  270
  302
  337
  375
  416
  459
  505
  555
  606
  661
  718
  778
  840
  905
  973
  1,042
  1,115
  1,191
  1,269
  1,351
  1,436
  1,524
  1,615
Operating income, $m
  -12
  16
  54
  101
  157
  224
  302
  392
  494
  607
  733
  870
  1,018
  1,178
  1,349
  1,530
  1,722
  1,924
  2,137
  2,359
  2,591
  2,834
  3,086
  3,349
  3,622
  3,906
  4,201
  4,508
  4,827
  5,158
  5,503
EBITDA, $m
  -5
  16
  54
  101
  157
  224
  302
  392
  494
  607
  733
  870
  1,018
  1,178
  1,349
  1,530
  1,722
  1,924
  2,137
  2,359
  2,591
  2,834
  3,086
  3,349
  3,622
  3,906
  4,201
  4,508
  4,827
  5,158
  5,503
Interest expense (income), $m
  19
  15
  21
  31
  44
  59
  77
  98
  121
  148
  178
  211
  246
  285
  327
  371
  418
  468
  521
  576
  634
  694
  757
  823
  891
  962
  1,036
  1,112
  1,192
  1,274
  1,360
Earnings before tax, $m
  -12
  1
  33
  69
  113
  165
  225
  295
  373
  459
  555
  659
  772
  893
  1,022
  1,159
  1,304
  1,456
  1,616
  1,783
  1,957
  2,139
  2,329
  2,526
  2,731
  2,944
  3,165
  3,396
  3,635
  3,884
  4,143
Tax expense, $m
  -6
  0
  9
  19
  31
  45
  61
  80
  101
  124
  150
  178
  208
  241
  276
  313
  352
  393
  436
  481
  528
  578
  629
  682
  737
  795
  855
  917
  981
  1,049
  1,119
Net income, $m
  -6
  1
  24
  50
  83
  120
  165
  215
  272
  335
  405
  481
  563
  652
  746
  846
  952
  1,063
  1,179
  1,301
  1,429
  1,562
  1,700
  1,844
  1,994
  2,149
  2,311
  2,479
  2,654
  2,835
  3,024

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  76
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  363
  395
  530
  696
  896
  1,132
  1,406
  1,719
  2,072
  2,466
  2,900
  3,373
  3,886
  4,437
  5,025
  5,650
  6,311
  7,006
  7,736
  8,500
  9,299
  10,131
  10,998
  11,900
  12,837
  13,812
  14,825
  15,877
  16,971
  18,108
  19,291
Adjusted assets (=assets-cash), $m
  287
  395
  530
  696
  896
  1,132
  1,406
  1,719
  2,072
  2,466
  2,900
  3,373
  3,886
  4,437
  5,025
  5,650
  6,311
  7,006
  7,736
  8,500
  9,299
  10,131
  10,998
  11,900
  12,837
  13,812
  14,825
  15,877
  16,971
  18,108
  19,291
Revenue / Adjusted assets
  0.369
  0.370
  0.370
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
Average production assets, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Working capital, $m
  0
  73
  98
  128
  165
  209
  259
  317
  382
  455
  535
  622
  717
  819
  927
  1,042
  1,164
  1,293
  1,427
  1,568
  1,716
  1,869
  2,029
  2,195
  2,368
  2,548
  2,735
  2,929
  3,131
  3,341
  3,559
Total debt, $m
  254
  252
  374
  524
  704
  916
  1,162
  1,444
  1,762
  2,116
  2,507
  2,933
  3,394
  3,890
  4,420
  4,982
  5,576
  6,202
  6,860
  7,547
  8,266
  9,015
  9,795
  10,607
  11,451
  12,328
  13,239
  14,187
  15,171
  16,195
  17,259
Total liabilities, $m
  357
  355
  477
  627
  807
  1,019
  1,265
  1,547
  1,865
  2,219
  2,610
  3,036
  3,497
  3,993
  4,523
  5,085
  5,679
  6,305
  6,963
  7,650
  8,369
  9,118
  9,898
  10,710
  11,554
  12,431
  13,342
  14,290
  15,274
  16,298
  17,362
Total equity, $m
  6
  39
  53
  70
  90
  113
  141
  172
  207
  247
  290
  337
  389
  444
  503
  565
  631
  701
  774
  850
  930
  1,013
  1,100
  1,190
  1,284
  1,381
  1,482
  1,588
  1,697
  1,811
  1,929
Total liabilities and equity, $m
  363
  394
  530
  697
  897
  1,132
  1,406
  1,719
  2,072
  2,466
  2,900
  3,373
  3,886
  4,437
  5,026
  5,650
  6,310
  7,006
  7,737
  8,500
  9,299
  10,131
  10,998
  11,900
  12,838
  13,812
  14,824
  15,878
  16,971
  18,109
  19,291
Debt-to-equity ratio
  42.333
  6.390
  7.060
  7.520
  7.850
  8.090
  8.270
  8.400
  8.500
  8.580
  8.640
  8.690
  8.730
  8.770
  8.800
  8.820
  8.840
  8.850
  8.870
  8.880
  8.890
  8.900
  8.910
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.940
  8.950
Adjusted equity ratio
  0.021
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -6
  1
  24
  50
  83
  120
  165
  215
  272
  335
  405
  481
  563
  652
  746
  846
  952
  1,063
  1,179
  1,301
  1,429
  1,562
  1,700
  1,844
  1,994
  2,149
  2,311
  2,479
  2,654
  2,835
  3,024
Depreciation, amort., depletion, $m
  7
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Funds from operations, $m
  67
  1
  24
  50
  83
  120
  165
  215
  272
  335
  405
  481
  563
  652
  746
  846
  952
  1,063
  1,179
  1,301
  1,429
  1,562
  1,700
  1,844
  1,994
  2,149
  2,311
  2,479
  2,654
  2,835
  3,024
Change in working capital, $m
  28
  20
  25
  31
  37
  44
  51
  58
  65
  73
  80
  87
  95
  102
  109
  115
  122
  128
  135
  141
  147
  154
  160
  166
  173
  180
  187
  194
  202
  210
  218
Cash from operations, $m
  39
  -19
  -1
  20
  46
  77
  114
  157
  207
  263
  325
  394
  469
  550
  637
  731
  830
  934
  1,045
  1,160
  1,282
  1,408
  1,540
  1,677
  1,820
  1,969
  2,124
  2,285
  2,452
  2,626
  2,806
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
New CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from investing activities, $m
  -76
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Free cash flow, $m
  -37
  -19
  -1
  20
  46
  77
  114
  157
  207
  263
  325
  394
  469
  550
  637
  731
  830
  934
  1,045
  1,160
  1,282
  1,408
  1,540
  1,677
  1,820
  1,969
  2,124
  2,285
  2,452
  2,626
  2,806
Issuance/(repayment) of debt, $m
  64
  74
  122
  149
  180
  212
  246
  282
  318
  354
  390
  426
  461
  496
  530
  562
  595
  626
  657
  688
  718
  749
  780
  812
  844
  877
  912
  947
  985
  1,024
  1,064
Issuance/(repurchase) of shares, $m
  -1
  32
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  63
  106
  122
  149
  180
  212
  246
  282
  318
  354
  390
  426
  461
  496
  530
  562
  595
  626
  657
  688
  718
  749
  780
  812
  844
  877
  912
  947
  985
  1,024
  1,064
Total cash flow (excl. dividends), $m
  25
  88
  121
  169
  225
  289
  361
  439
  525
  617
  715
  820
  930
  1,046
  1,167
  1,293
  1,424
  1,560
  1,702
  1,848
  2,000
  2,157
  2,320
  2,489
  2,664
  2,846
  3,035
  3,232
  3,436
  3,649
  3,871
Retained Cash Flow (-), $m
  5
  -33
  -14
  -17
  -20
  -24
  -27
  -31
  -35
  -39
  -43
  -47
  -51
  -55
  -59
  -62
  -66
  -70
  -73
  -76
  -80
  -83
  -87
  -90
  -94
  -97
  -101
  -105
  -109
  -114
  -118
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  55
  107
  153
  206
  266
  333
  408
  489
  578
  672
  773
  879
  991
  1,108
  1,231
  1,358
  1,491
  1,629
  1,772
  1,920
  2,074
  2,233
  2,399
  2,571
  2,749
  2,934
  3,127
  3,327
  3,535
  3,752
Discount rate, %
 
  11.10
  11.66
  12.24
  12.85
  13.49
  14.17
  14.88
  15.62
  16.40
  17.22
  18.08
  18.98
  19.93
  20.93
  21.98
  23.08
  24.23
  25.44
  26.71
  28.05
  29.45
  30.92
  32.47
  34.09
  35.80
  37.59
  39.47
  41.44
  43.51
  45.69
PV of cash for distribution, $m
 
  49
  86
  108
  127
  141
  150
  154
  153
  147
  137
  124
  109
  93
  77
  63
  49
  37
  28
  20
  14
  9
  6
  4
  2
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1
  49.1

Atlanticus Holdings Corporation is focused on providing financial services. Through its subsidiaries, the Company offers an array of financial products and services. The Company operates through two segments: Credit and Other Investments, and Auto Finance. The Company's Credit and Other Investments segment includes its point-of-sale and direct-to-consumer finance operations, investments in and servicing of its various credit card receivables portfolios and other product development and limited investment in consumer finance technology platforms that capitalize on its credit infrastructure. The Company's Auto Finance segment operations are principally conducted through its CAR platform, which purchases and services loans secured by automobiles from or for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here used car business. The Company also provides loan servicing activities.

FINANCIAL RATIOS  of  Atlanticus Holdings (ATLC)

Valuation Ratios
P/E Ratio -5.9
Price to Sales 0.3
Price to Book 5.9
Price to Tangible Book
Price to Cash Flow 0.9
Price to Free Cash Flow 0.9
Growth Rates
Sales Growth Rate -13.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -100%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 1
Current Ratio NaN
LT Debt to Equity 1883.3%
Total Debt to Equity 4233.3%
Interest Coverage 0
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 0.7%
Return On Total Capital -2.6%
Ret/ On T. Cap. - 3 Yr. Avg. 0.5%
Return On Equity -70.6%
Return On Equity - 3 Yr. Avg. 42.2%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 55.7%
Gross Margin - 3 Yr. Avg. 57.8%
EBITDA Margin 13.2%
EBITDA Margin - 3 Yr. Avg. 29.9%
Operating Margin -11.3%
Oper. Margin - 3 Yr. Avg. -8.5%
Pre-Tax Margin -11.3%
Pre-Tax Margin - 3 Yr. Avg. -8.2%
Net Profit Margin -5.7%
Net Profit Margin - 3 Yr. Avg. 0.1%
Effective Tax Rate 50%
Eff/ Tax Rate - 3 Yr. Avg. 75.3%
Payout Ratio 0%

ATLC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATLC stock intrinsic value calculation we used $106 million for the last fiscal year's total revenue generated by Atlanticus Holdings. The default revenue input number comes from 2016 income statement of Atlanticus Holdings. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ATLC stock valuation model: a) initial revenue growth rate of 37.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11.1%, whose default value for ATLC is calculated based on our internal credit rating of Atlanticus Holdings, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Atlanticus Holdings.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ATLC stock the variable cost ratio is equal to 19.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $98 million in the base year in the intrinsic value calculation for ATLC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 8.4% for Atlanticus Holdings.

Corporate tax rate of 27% is the nominal tax rate for Atlanticus Holdings. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ATLC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ATLC are equal to 0%.

Life of production assets of 0 years is the average useful life of capital assets used in Atlanticus Holdings operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ATLC is equal to 50%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $6 million for Atlanticus Holdings - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 13.567 million for Atlanticus Holdings is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Atlanticus Holdings at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
AXP American Expre 98.32 90.53  hold
ADS Alliance Data 261.85 126.12  str.sell
GDOT Green Dot Cl A 62.54 76.23  buy

COMPANY NEWS

▶ Atlanticus Holdings Corp. Earnings Q2, 2015   [Sep-09  12:39PM  Capital Cube]
▶ 10-Q for Atlanticus Holdings Corp.   [Aug-16  08:12PM  at Company Spotlight]
▶ 10-Q for Atlanticus Holdings Corp.   [May-17  08:11PM  at Company Spotlight]
▶ 10-K for Atlanticus Holdings Corp.   [Mar-08  08:08PM  at Company Spotlight]
▶ 10-Q for Atlanticus Holdings Corp.   [Nov-16  07:08PM  Company Spotlight]
▶ ATLANTICUS HOLDINGS CORP Financials   [May-17  01:04PM  EDGAR Online Financials]
▶ ATLANTICUS HOLDINGS CORP Financials   [Dec-06-12 01:04PM  EDGAR Online Financials]
▶ ATLANTICUS HOLDINGS CORP Files SEC form 8-K, Other Events   [Dec-04-12 08:19AM  EDGAR Online]
▶ Envistacom expands in Perimeter   [Nov-26-12 11:04AM  at bizjournals.com]
▶ COMPUCREDIT HOLDINGS CORP Financials   [Nov-16-12 01:04PM  EDGAR Online Financials]
Financial statements of ATLC
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.