Credit Acceptance (CACC) AI Stock Analysis

• Market Cap: $5.37B
• Dividend Yield: N/A
• Average Volume (3M): 109.21K
• Price to Earnings (P/E): 13.8
• Beta (1Y): 1.24
• Revenue Growth: 12.63%
• EPS Growth: 149.03%
• Country: US
• Employees: 2,431
• Sector: Financial
• Sector Strength: 72
• Industry: Financial - Credit Services
• EPS (TTM): 8.56
• Shares Outstanding: 11,237,661
• 10 Day Avg. Volume: 138,452
• 30 Day Avg. Volume: 109,213
• 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: 2.22
• Enterprise Value/Revenue: 5.29
• Enterprise Value/Gross Profit: 7.44
• Enterprise Value/Ebitda: 22.86
• 1Y Price Target: $499.00
• Price Target Upside: 5.11% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 71 Outperform
• Price Target: $528.00 ▲(11.22% Upside)

Credit Acceptance's overall stock score reflects strong financial performance with robust revenue growth and operational efficiency. However, technical indicators suggest a bearish trend, and the earnings call highlighted mixed results with both achievements and challenges. Valuation is reasonable, and recent corporate events enhance financial flexibility.

Positive Factors

Financial Performance

Revenue was better than estimates as average portfolio yield increased by 50 bps.

Shareholder Confidence

Buybacks were strong in the quarter with $262mm, indicating confidence in the company's value.

Negative Factors

Cash Flow

CACC lowered its forecasted net cash flow rate for the eighth consecutive quarter.

Forecast and Guidance

CACC decreased its forecasted collections by $55mm, driven by back-book underperformance.

Market Share

CACC's market share has declined to 5.4% from 6.6% compared to the previous year.

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 strong revenue growth and efficient operational management, evidenced by impressive gross and EBIT margins. The balance sheet is characterized by zero debt, enhancing financial stability, though the equity ratio suggests a need for balance in financing strategies. Cash flows remain healthy, with high conversion ratios, yet potential concerns arise from declining free cash flow growth.

Income Statement

Credit Acceptance has shown a strong revenue growth rate of 13.7% year-over-year from 2023 to 2024. The company maintained a high gross profit margin of 100%, indicating effective management of cost of goods. However, the net profit margin decreased from 15.0% to 11.5%, signifying increased expenses or other factors affecting net income. The EBIT margin showed a substantial increase from 23.1% to 76.8%, highlighting improved operational efficiency.

Balance Sheet

The balance sheet reveals a strong equity position with a debt-to-equity ratio of 0, indicating no debt burden as of 2024. The return on equity (ROE) is 14.2%, reflecting decent profitability relative to shareholder equity. The equity ratio stands at 19.8%, suggesting moderate leverage. While the lack of debt is a strength, the equity ratio indicates the need for careful management of equity financing.

Cash Flow

The company exhibited a slight decline in free cash flow from 2023 to 2024. Despite this, the operating cash flow to net income ratio is robust at 4.6, suggesting strong cash generation relative to net income. The free cash flow to net income ratio is high at 4.6, emphasizing efficient cash conversion. However, the negative trend in free cash flow growth rate may warrant attention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.25B	2.13B	1.90B	1.18B	1.80B	1.62B
Gross Profit	1.60B	1.33B	1.28B	709.40M	1.38B	1.20B
EBITDA	520.40M	352.90M	373.90M	711.70M	1.26B	564.30M
Net Income	424.40M	247.90M	286.10M	535.80M	958.30M	421.00M
Balance Sheet
Total Assets	8.72B	8.85B	7.61B	6.90B	7.05B	7.49B
Cash, Cash Equivalents and Short-Term Investments	572.30M	951.40M	13.20M	7.70M	23.30M	16.00M
Total Debt	6.47B	6.35B	5.07B	4.59B	4.62B	4.61B
Total Liabilities	7.17B	7.11B	5.86B	5.28B	5.23B	5.19B
Stockholders Equity	1.55B	1.75B	1.75B	1.62B	1.82B	2.30B
Cash Flow
Free Cash Flow	1.11B	1.14B	1.20B	1.24B	1.06B	976.70M
Operating Cash Flow	1.11B	1.14B	1.20B	1.24B	1.07B	985.20M
Investing Cash Flow	-1.10B	-1.72B	-1.42B	-460.60M	437.30M	-673.50M
Financing Cash Flow	33.40M	957.30M	266.20M	-794.60M	-1.47B	-433.20M

Credit Acceptance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 474.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 474.74 is below the 20-day moving average (MA) of 488.13, below the 50-day MA of 500.76, and below the 200-day MA of 487.79, indicating a bearish trend. The MACD of -9.72 indicates Negative momentum. The RSI at 45.60 is Neutral, neither overbought nor oversold. The STOCH value of 74.83 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	73 Outperform	$6.95B	10.57	20.47%	7.26%	9.41%	13.98%
CACC	71 Outperform	$5.37B	13.77	27.30%	―	12.63%	149.03%
LC	69 Neutral	$1.78B	24.22	5.50%	―	7.54%	70.26%
Sector *	68 Neutral	$17.53B	11.77	10.43%	3.83%	9.84%	1.31%
AGM	66 Neutral	$2.00B	11.09	13.85%	3.08%	26.87%	3.35%
SLM	63 Neutral	$6.88B	16.66	18.99%	1.65%	-4.34%	-38.01%
NAVI	57 Neutral	$1.31B	40.49	1.28%	4.87%	-25.37%	-75.77%

Credit Acceptance Corporate Events

Credit Acceptance Extends $300M Warehouse Facility Maturity

On July 30, 2025, Credit Acceptance Corporation announced an extension of its $300 million revolving secured warehouse facility’s maturity date from December 29, 2026, to July 30, 2028. The interest rate on borrowings was reduced from SOFR plus 221.4 basis points to SOFR plus 205 basis points, with no outstanding balance under the facility as of the announcement date. This strategic move is likely to enhance the company’s financial flexibility and strengthen its market position by potentially lowering borrowing costs.

The most recent analyst rating on (CACC) stock is a Sell with a $420.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.

Credit Acceptance Extends Warehouse Facility Maturity

On July 11, 2025, Credit Acceptance Corporation announced an extension of its $75.0 million revolving secured warehouse facility’s maturity date from September 30, 2026, to September 30, 2028. The amendment also reduced the interest rate on borrowings and the servicing fee, potentially enhancing the company’s financial flexibility and benefiting stakeholders by lowering costs associated with the facility.

The most recent analyst rating on (CACC) stock is a Sell with a $420.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.

Credit Acceptance Extends Credit Facility Maturity Date

On June 24, 2025, Credit Acceptance Corporation announced an extension of its revolving secured line of credit facility with a commercial bank syndicate, moving the maturity date from June 22, 2027, to June 22, 2028. This extension does not include any other material changes to the terms of the facility, and as of the announcement date, there was no outstanding balance under the facility.

The most recent analyst rating on (CACC) stock is a Sell with a $420.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.

Credit Acceptance Holds Annual Shareholders Meeting

On June 4, 2025, Credit Acceptance held its Annual Meeting of Shareholders, where shareholders elected six directors to serve until the 2026 annual meeting, approved executive officer compensation on an advisory basis, and ratified Grant Thornton LLP as the independent public accounting firm for 2025. These decisions reflect shareholder support for the company’s leadership and financial oversight, potentially impacting its governance and operational strategies moving forward.

The most recent analyst rating on (CACC) stock is a Sell with a $420.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.