AtlasClear Holdings, Inc. (ATCH) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001963088

P/B 0.03

P/E -0.03

P/S 0.01

Market Cap 174,836.94

ROIC (Qtr) -30.82

Div Yield % 0.00

Rev 1y % (Qtr) 51.59

Total Debt (Qtr) 9.17 Mn

Debt/Equity (Qtr) 1.34

About

AtlasClear Holdings, Inc. (ATCH), a fintech-driven business-to-business platform, operates in the financial technology industry. The company is dedicated to creating a more efficient platform for trading, clearing, settlement, and banking. AtlasClear's main business activities include providing a range of financial services, such as trading applications, real-time trading, clearing, and settlement capabilities, risk management, and compliance solutions. The company operates in several segments, including the AtlasClear Platform, BondQuantum, SURFACExchange,...

AtlasClear Holdings, Inc. (ATCH), a fintech-driven business-to-business platform, operates in the financial technology industry. The company is dedicated to creating a more efficient platform for trading, clearing, settlement, and banking.

AtlasClear's main business activities include providing a range of financial services, such as trading applications, real-time trading, clearing, and settlement capabilities, risk management, and compliance solutions. The company operates in several segments, including the AtlasClear Platform, BondQuantum, SURFACExchange, and Pacsquare Assets.

The AtlasClear Platform is a proprietary trading platform with clearing and settlement capabilities, providing a fully electronic, anonymous, and multi-lateral trading platform for over-the-counter (OTC) FX trading (spot and options) from order creation through settlement. BondQuantum is a real-time advance analytical program for the analysis of bonds, designed to improve the accuracy of underwriting fixed income instruments by applying an up-to-the-minute credit rating for fixed income securities. SURFACExchange is a fully electronic, completely anonymous central limit order book for foreign exchange (FX) options for institutional clients, empowering a marketplace and making trading of FX options more efficient and accessible to its customers. Pacsquare Assets include a suite of technologies aimed at enhancing the fintech ecosystem and making it easier for businesses to accelerate their business growth, offering proprietary trading applications, real-time trading applications, digital account opening, AML risk assessment verification, and the ability to customize customer and broker-dealer experience, including risk management and compliance.

AtlasClear Holdings generates revenue through its various segments, with a primary focus on serving financial services firms, generally with annual revenues up to $1 billion. These clients include brokerage firms, hedge funds, pension plans, and family offices that are not adequately served by today's larger correspondent clearing firms and banks.

The company is well-positioned within the industry, offering a modern, mission-critical suite of solutions to its clients. This includes a technology platform and specialized clearing and banking services that are essential for clients due to the complexities of investing infrastructure, collateral and capital requirements, and the complicated regulatory landscape. AtlasClear Holdings has a strong competitive advantage, as it believes that it can deliver a complete and modern platform that offers flexibility, speed, risk-management expertise, and scale, setting it apart from competitors who only offer a subset of these solutions.

AtlasClear Holdings' leadership team is comprised of seasoned industry executives supported by a purpose-built board of directors, with extensive experience at firms such as ICE, Penson Clearing, Southwest Securities, NexTrade, Anderen Bank, Stonex, and The Chicago Board of Trade. The company is subject to extensive regulation by the SEC, FINRA, and other governmental regulatory authorities, maintaining net capital of at least $250,000 and having excess net capital of $10.6 million as of December 31, 2023.

AtlasClear Holdings' product and service brand names include the AtlasClear Platform, BondQuantum, SURFACExchange, and Pacsquare Assets, all of which enhance the fintech ecosystem and provide essential solutions to businesses in the financial industry.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 37.20M provide 5.24x coverage of short-term debt 7.10M, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 54.87M provides 5.99x coverage of total debt 9.17M, indicating robust asset backing and low credit risk.
Strong free cash flow of (1.85M) provides 12.78x coverage of acquisition spending (145000), indicating disciplined M&A strategy.
Tangible assets of 54.87M provide robust 14.42x coverage of other current liabilities 3.81M, indicating strong asset backing.
Strong cash position of 37.20M provides 9.77x coverage of other current liabilities 3.81M, indicating excellent liquidity.

Cons

Cash reserves of 37.20M provide limited coverage of acquisition spending of (145000), which is -256.55x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
The company's operating cash flow of (1.85M) shows concerning coverage of stock compensation expenses of 236578, with a -7.84 ratio indicating potential earnings quality issues.
Operating earnings of 2.19M show weak coverage of depreciation charges of 1.42M, with a 1.54 ratio indicating high capital intensity and potential reinvestment needs.
Free cash flow of (1.85M) represents just -0.38x of debt issuance 4.89M, suggesting concerning reliance on leverage rather than internal cash generation for growth.
Operating cash flow of (1.85M) barely covers operating expenses of 3.37M with a -0.55 ratio, suggesting thin operational efficiency margins and limited flexibility.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	-0.28	2.56
EV to Cash from Ops.	11.19	38.32
EV to Debt	-2.26	-11.37
EV to EBIT	-9.49	-12.79
EV to EBITDA	6.48	7.72
EV to Free Cash Flow [EV/FCF]	11.19	24.22
EV to Market Cap	-118.69	0.58
EV to Revenue	-1.69	-35.00
Price to Book Value [P/B]	0.03	3.74
Price to Earnings [P/E]	-0.03	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	0.27	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	0.00	-404.11
Cash and Equivalents Growth (1y) %	19.68	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	101.95	31.15
EBITDA Growth (1y) %	75.93	49.02
EBIT Growth (1y) %	102.09	25.85
EBT Growth (1y) %	94.66	17.82
EPS Growth (1y) %	98.43	70.69
FCF Growth (1y) %	82.17	295.45
Gross Profit Growth (1y) %	108.94	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.17	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.75	1.21
Current Ratio	0.95	2.57
Debt to Equity Ratio	1.34	-0.93
Interest Cover Ratio	0.27	-13.15
Times Interest Earned	0.27	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	29.30	-544.82
EBIT Margin %	17.78	-197.78
EBT Margin %	-47.73	-602.74
Gross Margin %	83.10	52.06
Net Profit Margin %	-44.20	-605.52

AtlasClear Holdings, Inc. (NYSE: ATCH)