Credit Acceptance (CACC) AI Stock Analysis

• Market Cap: $5.79B
• Dividend Yield: N/A
• Average Volume (3M): 186.52K
• Price to Earnings (P/E): 21.6
• Beta (1Y): 1.19
• Revenue Growth: 13.77%
• EPS Growth: 20.95%
• Country: US
• Employees: 2,431
• Sector: Financial
• Sector Strength: 78
• Industry: Financial - Credit Services
• EPS (TTM): 9.35
• Shares Outstanding: 11,603,475
• 10 Day Avg. Volume: 115,740
• 30 Day Avg. Volume: 186,522
• PEG Ratio: -0.36
• Price to Book (P/B): 3.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.21
• Enterprise Value/Market Cap: 1.90
• Enterprise Value/Revenue: 1.31
• Enterprise Value/Gross Profit: 7.09
• Enterprise Value/Ebitda: 4.93
• 1Y Price Target: $497.50
• Price Target Upside: -4.15% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 68 Neutral
• Price Target: $547.00 ▲(5.39%Upside)

Credit Acceptance receives a moderate score due to strong financial performance and robust cash flow generation. However, challenges such as declining market share, high valuation, and mixed earnings call sentiment weigh on the overall score. Technical indicators suggest caution, with the stock trading near its moving averages and showing potential oversold conditions.

Positive Factors

Financial Performance

The level of deterioration in cash collections is slowing, which is expected to result in lower provisions and higher adjusted revenues and earnings.

Revenue

The beat was driven by lower provision, modestly higher revenue, and lower operating expenses.

Negative Factors

Cash Flow

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

Market Share

CACC's market share fell to 5.2% from 6.0%, which is a significant concern.

Unit Volume

Unit volume originations decreased, likely impacted by scorecard change and increased competition.

Credit Acceptance Business Overview & Revenue Model

Company Description

Credit Acceptance Corporation (CACC) is a financial services company operating primarily in the subprime auto lending sector. Founded in 1972 and headquartered in Southfield, Michigan, Credit Acceptance provides auto loans and related financial products to consumers with limited or poor credit histories. The company partners with a network of car dealerships across the United States to offer its financing solutions, enabling consumers to purchase vehicles while helping dealers increase their sales and profitability.

How the Company Makes Money

Credit Acceptance makes money through several key revenue streams. The primary source of revenue is the interest and fees charged on auto loans provided to consumers. The company purchases retail installment contracts from a network of automotive dealers, who sell vehicles to consumers and subsequently assign the loan contracts to Credit Acceptance. These contracts typically carry higher interest rates due to the subprime nature of the borrowers. Additionally, Credit Acceptance generates income from servicing fees and various other charges associated with the management and collection of these loans. The company's profitability is further supported by its underwriting and risk management practices, which are designed to mitigate potential losses from defaults. Partnerships with a wide array of dealerships across the U.S. enhance its market reach and contribute significantly to its earnings.

Credit Acceptance Financial Statement Overview

Summary

Credit Acceptance shows strong revenue growth and operational efficiency with high gross and EBIT margins. However, declining net profit margins and free cash flow growth present concerns. The balance sheet is strong with zero debt, but the equity ratio indicates moderate leverage.

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	2.20B	2.13B	1.90B	1.18B	1.80B	1.62B
Gross Profit	1.55B	1.33B	1.28B	709.40M	1.38B	1.20B
EBITDA	246.10M	352.90M	373.90M	711.70M	1.26B	564.30M
Net Income	289.90M	247.90M	286.10M	535.80M	958.30M	421.00M
Balance Sheet
Total Assets	9.26B	8.85B	7.61B	6.90B	7.05B	7.49B
Cash, Cash Equivalents and Short-Term Investments	528.80M	951.40M	13.20M	7.70M	23.30M	16.00M
Total Debt	0.00	6.35B	5.07B	4.59B	4.62B	4.61B
Total Liabilities	7.55B	7.11B	5.86B	5.28B	5.23B	5.19B
Stockholders Equity	1.71B	1.75B	1.75B	1.62B	1.82B	2.30B
Cash Flow
Free Cash Flow	1.17B	1.14B	1.20B	1.24B	1.06B	976.70M
Operating Cash Flow	1.17B	1.14B	1.20B	1.24B	1.07B	985.20M
Investing Cash Flow	-1.43B	-1.72B	-1.42B	-460.60M	437.30M	-673.50M
Financing Cash Flow	807.70M	957.30M	266.20M	-794.60M	-1.47B	-433.20M

Credit Acceptance Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 519.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 519.04 is above the 20-day moving average (MA) of 515.67, above the 50-day MA of 502.71, and above the 200-day MA of 485.72, indicating a bullish trend. The MACD of 1.35 indicates Positive momentum. The RSI at 54.73 is Neutral, neither overbought nor oversold. The STOCH value of 40.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CACC.

Credit Acceptance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AGM	73 Outperform	$1.86B	10.78	13.51%	3.35%	25.81%	-1.60%
Sector *	71 Outperform	S$32.00B	13.94	11.69%	5.07%	8.28%	16.42%
NAVI	69 Neutral	$1.43B	27.84	2.09%	4.53%	-21.19%	-67.35%
CACC	68 Neutral	$5.79B	21.55	17.24%	―	13.77%	20.95%
OMF	68 Neutral	$6.88B	12.24	17.46%	7.20%	9.07%	―
SLM	66 Neutral	$6.89B	11.82	27.60%	1.53%	-0.70%	-12.72%
LC	62 Neutral	$1.49B	28.81	3.86%	―	5.72%	31.82%

Credit Acceptance Corporate Events

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.