Are Investors Undervaluing Atlanticus (ATLC) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Atlanticus (ATLC) is a stock many investors are watching right now. ATLC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 8.40. This compares to its industry's average Forward P/E of 16.02. Over the past year, ATLC's Forward P/E has been as high as 12.46 and as low as 4.40, with a median of 6.87.

Another notable valuation metric for ATLC is its P/B ratio of 1.71. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.29. Over the past 12 months, ATLC's P/B has been as high as 2.08 and as low as 0.86, with a median of 1.23.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ATLC has a P/S ratio of 0.63. This compares to its industry's average P/S of 1.56.

Finally, investors should note that ATLC has a P/CF ratio of 6.42. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ATLC's current P/CF looks attractive when compared to its industry's average P/CF of 15.12. Within the past 12 months, ATLC's P/CF has been as high as 9.86 and as low as 3.79, with a median of 5.61.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Atlanticus is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ATLC feels like a great value stock at the moment.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research

Source Zacks-com