Credit Acceptance (CACC) AI Stock Analysis

• Market Cap: $4.74B
• Dividend Yield: N/A
• Average Volume (3M): 132.55K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 1.23
• Revenue Growth: 10.30%
• EPS Growth: 154.64%
• Country: US
• Employees: 2,431
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 10.28
• Shares Outstanding: 11,031,544
• 10 Day Avg. Volume: 124,218
• 30 Day Avg. Volume: 132,546
• PEG Ratio: -2.62
• Price to Book (P/B): 3.31
• Price to Sales (P/S): 2.71
• P/FCF Ratio: 5.09
• Enterprise Value/Market Cap: 2.51
• Enterprise Value/Revenue: 5.22
• Enterprise Value/Gross Profit: 11.35
• Enterprise Value/Ebitda: 26.55
• 1Y Price Target: $430.00
• Price Target Upside: 1.81% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $475.00 ▲(12.47% Upside)

The overall stock score of 60 reflects a combination of solid financial performance and reasonable valuation, offset by technical weakness and negative sentiment from the latest earnings call. The company's high leverage and declining loan performance are significant risks, while the lack of a dividend yield may limit appeal. Positive developments in technology and workplace recognition provide some support, but are overshadowed by competitive pressures and market share declines.

Positive Factors

Technological Advancements

The modernization of the loan origination system enhances operational efficiency and positions the company for faster adaptation to market changes, supporting long-term competitiveness.

Dealer Network Expansion

Expanding the dealer network enhances market reach and contract sourcing, supporting sustainable revenue growth and market position.

Workplace Excellence

Consistent recognition as a top workplace can attract and retain talent, fostering innovation and operational excellence, crucial for long-term success.

Negative Factors

High Leverage

High leverage can strain financial flexibility and increase vulnerability to interest rate hikes, potentially impacting long-term financial stability.

Declining Loan Performance

Underperforming loan vintages can reduce cash flow and profitability, challenging the company's ability to sustain growth and meet financial obligations.

Reduced Market Share

A declining market share in a core segment indicates increased competition and could hinder revenue growth, affecting long-term market positioning.

Credit Acceptance Business Overview & Revenue Model

Company Description

Credit Acceptance Corporation provides financing programs, and related products and services to independent and franchised automobile dealers in the United States. The company advances money to dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps various amounts collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. The company was founded in 1972 and is headquartered in Southfield, Michigan.

How the Company Makes Money

Credit Acceptance generates revenue primarily through the purchase of retail installment contracts from automobile dealers. When a dealer sells a vehicle to a customer using financing, Credit Acceptance buys the contract at a discount, allowing the dealer to receive immediate cash. The company then collects monthly payments from the consumer over the life of the loan, which includes interest and fees. This creates a significant revenue stream through interest income. Additionally, Credit Acceptance may earn money from late fees and other ancillary fees associated with the financing agreements. The company's partnerships with a wide network of automotive dealers enhance its ability to source contracts, while its focus on subprime financing allows it to tap into a market segment that often faces challenges in obtaining traditional financing.

Credit Acceptance Financial Statement Overview

Summary

Credit Acceptance demonstrates solid financial performance with strong revenue growth and profitability. However, high leverage poses a risk, and declining free cash flow growth could impact future financial flexibility. The company needs to manage its debt levels carefully while maintaining operational efficiencies to sustain its financial health.

Income Statement

Credit Acceptance shows a stable revenue growth with a TTM increase of 2.02%. The gross profit margin is strong at 71.14%, indicating efficient cost management. However, the net profit margin has decreased to 18.88% from previous highs, suggesting increased expenses or lower pricing power. EBIT and EBITDA margins have improved significantly in the TTM, indicating better operational efficiency.

Balance Sheet

The company has a high debt-to-equity ratio of 4.16, which indicates significant leverage and potential risk if interest rates rise. Return on equity is robust at 25.48%, reflecting effective use of equity to generate profits. The equity ratio is relatively low, suggesting reliance on debt financing.

Cash Flow

Operating cash flow remains strong with a coverage ratio of 2.43, indicating good cash generation relative to net income. However, free cash flow has declined by 5.48% in the TTM, which could impact future investments or debt repayments. The free cash flow to net income ratio remains nearly 1, showing efficient conversion of income to cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.28B	2.13B	1.88B	1.82B	1.85B	1.67B
Gross Profit	1.05B	1.33B	1.26B	1.35B	1.43B	1.25B
EBITDA	448.00M	352.90M	373.90M	727.90M	1.28B	576.60M
Net Income	453.80M	247.90M	286.10M	535.80M	958.30M	421.00M
Balance Sheet
Total Assets	8.64B	8.85B	7.61B	6.90B	7.05B	7.49B
Cash, Cash Equivalents and Short-Term Investments	607.70M	854.50M	13.20M	7.70M	23.30M	16.00M
Total Debt	0.00	6.35B	5.07B	4.59B	4.62B	4.61B
Total Liabilities	7.06B	7.11B	5.86B	5.28B	5.23B	5.19B
Stockholders Equity	1.58B	1.75B	1.75B	1.62B	1.82B	2.30B
Cash Flow
Free Cash Flow	1.09B	1.14B	1.20B	1.24B	1.06B	976.70M
Operating Cash Flow	1.09B	1.14B	1.20B	1.24B	1.07B	985.20M
Investing Cash Flow	-800.60M	-1.72B	-1.42B	-460.60M	437.30M	-673.50M
Financing Cash Flow	-508.40M	957.30M	266.20M	-794.60M	-1.47B	-433.20M

Credit Acceptance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 422.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CACC, the sentiment is Negative. The current price of 422.35 is below the 20-day moving average (MA) of 474.40, below the 50-day MA of 487.50, and below the 200-day MA of 494.13, indicating a bearish trend. The MACD of -16.38 indicates Positive momentum. The RSI at 35.88 is Neutral, neither overbought nor oversold. The STOCH value of 21.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CACC.

Credit Acceptance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OMF	77 Outperform	$7.09B	10.22	21.41%	6.91%	9.51%	29.38%
LC	69 Neutral	$2.09B	20.43	7.40%	―	9.68%	94.85%
AGM	68 Neutral	$1.75B	9.34	13.72%	3.64%	27.36%	12.55%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SLM	64 Neutral	$5.43B	9.43	27.85%	1.95%	0.59%	-1.11%
CACC	60 Neutral	$4.74B	11.38	28.14%	―	10.30%	154.64%
NAVI	44 Neutral	$1.14B	―	-1.95%	5.46%	-25.22%	-174.34%

Credit Acceptance Corporate Events

Credit Acceptance Faces Mixed Earnings Call Sentiment

The recent earnings call for Credit Acceptance Corporation painted a mixed picture, with both positive strides and notable challenges. While the company celebrated advancements in technology and workplace accolades, it faced significant hurdles such as declining loan performance, reduced market share, and increased expenses. The overall sentiment from the call leaned towards the negative, primarily due to these impactful challenges overshadowing the positives.

Credit Acceptance Reports Strong Q3 2025 Earnings Growth

Credit Acceptance Corporation is a financial services company that provides innovative financing solutions to automobile dealers, enabling them to sell vehicles to consumers with impaired or limited credit histories. The company operates primarily in the auto finance sector and is known for its unique approach that allows consumers to improve their credit scores through its programs.

Credit Acceptance Announces New CEO Appointment

On October 25, 2025, Credit Acceptance Corporation announced the retirement of Kenneth S. Booth as CEO, effective January 31, 2026, with Vinayak R. Hegde appointed as his successor starting November 13, 2025. Mr. Hegde, who has a strong background in marketing and digital transformation from companies like T-Mobile and Amazon, is expected to continue the company’s focus on innovation and customer service, potentially impacting its market position and stakeholder value positively.

The most recent analyst rating on (CACC) stock is a Hold with a $531.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.

Credit Acceptance Highlights Strong Liquidity Amid Challenges

Credit Acceptance Corporation has reported a declining loan forecast over the past two years amidst negative headlines in the auto industry. Despite this, the company maintains a strong margin of safety in its loan pricing and securitization trusts, which have historically performed well. As of September 30, 2025, the company forecasts total collections of $12.3 billion, providing a significant cushion for lenders. The company also highlights its robust liquidity position with $1.6 billion available on revolving credit facilities, ensuring operational stability despite economic volatility and industry challenges.

The most recent analyst rating on (CACC) stock is a Hold with a $531.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.

Credit Acceptance Authorizes Additional Share Repurchase

On September 29, 2025, Credit Acceptance Corporation’s Board of Directors authorized the repurchase of up to two million additional shares of the company’s common stock. This move, which adds to previous authorizations, allows for repurchases in various forms, including open market and privately negotiated transactions, without a specified expiration date. As of the authorization date, 190,018 shares remained under the prior repurchase authorization, indicating a strategic effort to manage share value and investor returns.

The most recent analyst rating on (CACC) stock is a Hold with a $552.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.

Credit Acceptance Extends $200M Warehouse Facility

On September 19, 2025, Credit Acceptance Corporation announced an extension of its $200 million revolving secured warehouse facility, with the new cessation date set for September 19, 2028. The interest rate on borrowings under this facility has been reduced, reflecting a decrease from SOFR plus 225 basis points to SOFR plus 185 basis points, with no outstanding balance under the facility as of the announcement date.

The most recent analyst rating on (CACC) stock is a Hold with a $552.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.

Credit Acceptance Reports Stable Loan Performance

Credit Acceptance Corporation reported that consumer loan performance for the two-month period ending August 31, 2025, remained consistent with recent trends. The company is running a small pilot program in 2025 to assess collections performance among borrowers without SSNs or ITINs, limited to five market areas, with results aligning with expectations and no current plans for expansion.

The most recent analyst rating on (CACC) stock is a Hold with a $505.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.