AtlasClear Holdings, Inc. focuses on operating as a technology enabled financial services firm. It creates a platform for trading, clearing, settlement, and banking of financial products with a focus on the small and middle market financial services firms. The company is based in Tampa, Florida.

AtlasClear Holdings, Inc.

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 100ppts over six months and grown 2ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -125.8% in the last 12 months, a decline from 36.1% in FY22. 

Historically, ATCH has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -223.6%, down from 121.5% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to -22.9%, below the peers. 

Another important profitability metric, return on assets (RoA), amounted to -18.7% in the last 12 months, a decrease from 5.4% in FY22. 

AtlasClear Holdings, Inc. reported a return on equity (RoE) of -26.2% in the last 12 months, down from 10.6% in FY22. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -4.2 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

ATCH has very poor trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is very unstable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, negligible return on capital, and poor working capital management. We note low margin volatility and adequate interest coverage, among the positive credit factors. 

In highly turbulent market conditions, ATCH is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, ATCH is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Considering past and projected metrics, the stock is distinctly 'cheaper' than its peers. In particular, the stock is undervalued on P/FCF. 

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AtlasClear Holdings, Inc.

$ 0.2

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AtlasClear Holdings, Inc.

$ 0.2

3

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