Credit Acceptance (CACC) AI Stock Analysis

• Market Cap: $5.43B
• Dividend Yield: N/A
• Average Volume (3M): 132.55K
• Price to Earnings (P/E): 13.3
• Beta (1Y): 1.22
• Revenue Growth: 10.30%
• EPS Growth: 154.64%
• Country: US
• Employees: 2,431
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 11.35
• Shares Outstanding: 10,747,682
• 10 Day Avg. Volume: 124,218
• 30 Day Avg. Volume: 132,546
• PEG Ratio: 0.13
• Price to Book (P/B): 3.22
• Price to Sales (P/S): 2.12
• P/FCF Ratio: 4.67
• Enterprise Value/Market Cap: 2.07
• Enterprise Value/Revenue: 4.91
• Enterprise Value/Gross Profit: 6.92
• Enterprise Value/Ebitda: 16.44
• 1Y Price Target: $470.00
• Price Target Upside: -4.06% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $518.00 ▲(5.74% Upside)
• Action: Downgraded Date: 02/16/26
• Date: Action: Downgraded 02/16/26

The score is primarily constrained by financial risk from a debt-heavy balance sheet and earnings volatility, despite strong cash generation. Technicals are moderately constructive and valuation looks reasonable at ~13x earnings. Recent commentary and KPIs indicate operational resilience but ongoing share and volume pressure, while recent ABS financing events modestly improve funding flexibility and costs.

Positive Factors

Operating cash generation

Consistent ~ $1.0–$1.24B operating cash flow and near-1x free cash flow to net income provide durable internal funding for loan purchases, ABS transactions, and capital returns. Strong cash conversion supports growth and loss absorption across credit cycles, improving strategic optionality.

Improving funding flexibility

Access to lower-cost, extended ABS facilities and recent $500M securitization materially reduce funding costs and refinancing pressure. Improved securitization execution preserves capacity to recycle capital into originations and lowers structural funding risk versus relying solely on on-balance debt.

Solid revenue and margin profile

Sustained revenue growth and very strong operating margins reflect favorable unit economics in subprime auto lending. High operating profitability creates a durable earnings base that can support investment in technology, dealer programs, and provisions, even if volumes fluctuate.

Negative Factors

High leverage / thin equity

A debt-heavy capital structure (debt ≈ $6.35B with equity ≈ $1.52B) materially increases sensitivity to funding stress or credit deterioration. High leverage constrains capital allocation, amplifies earnings volatility, and raises refinancing and covenant risks during adverse market or credit cycles.

Market share and dealer/volume pressure

Declining market share and shrinking dealer participation reduce origination scale and negotiating leverage with dealer partners. Persistent unit and dollar volume declines can erode revenue growth potential and weaken long-run customer acquisition economics if the distribution footprint fails to recover.

Rising initial provisions and vintage weakness

Higher per-unit initial provisions and measurable vintage underperformance indicate underwriting volatility and mix-driven loss pressure. Elevated provisions raise the break-even yield on new loans, require more capital to sustain growth, and compress long-term net returns if credit mixes persist.

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 interest earned on the loans it provides to consumers. The company purchases retail installment contracts from dealerships, which include the principal amount financed plus interest. This interest is a significant source of income, as the company typically charges higher rates to subprime borrowers. Additionally, Credit Acceptance earns revenue from fees associated with the loan servicing and collection processes. The company also benefits from partnerships with a network of automobile dealerships, which help expand its customer base and increase loan origination volume. The ability to sell loans to investors in the secondary market further enhances its revenue potential, as it can recycle capital and fund new loans.

Credit Acceptance Financial Statement Overview

Summary

Strong earnings power and cash generation (solid 2025 profitability and ~$1.0–$1.24B operating cash flow), but the balance sheet is a major risk: leverage is high/rising (debt ~ $6.35B with declining equity) and earnings have shown meaningful volatility versus the 2021–2022 peak.

Income Statement

Revenue has grown over time (from ~$1.67B in 2020 to ~$2.32B in 2025), with a particularly strong jump in 2025. Profitability remains solid in 2025 (about 18% net margin) and operating profitability is very strong in 2025 (mid-40% range), but results have been volatile versus prior years: net margin fell materially from very high levels in 2021–2022 and was more moderate in 2023–2024 before rebounding in 2025. Overall: strong earnings power, but with meaningful year-to-year swings that reduce predictability.

Balance Sheet

Leverage is high and rising: total debt is ~$6.35B in 2024–2025 while equity declined to ~$1.52B in 2025, pushing debt to equity to ~4.17x (up from ~2.04x in 2020). While returns on equity are healthy (about 28% in 2025), the capital structure is debt-heavy, and equity has trended down from 2020 levels—both of which increase financial risk if credit performance or funding conditions weaken.

Cash Flow

Cash generation is strong and consistent: operating cash flow has been roughly ~$1.0–$1.24B annually, and free cash flow closely tracks operating cash flow. Free cash flow is also closely aligned with net income (near 1.0x across years), which supports earnings quality. The main drawback is momentum: free cash flow growth is negative in 2023–2025 (including a sharp decline in 2025), indicating softer recent trajectory despite still-solid absolute cash generation.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.32B	2.13B	1.88B	1.82B	1.85B
Gross Profit	2.29B	1.33B	1.26B	1.35B	1.43B
EBITDA	1.06B	352.90M	373.90M	727.90M	1.28B
Net Income	423.90M	247.90M	286.10M	535.80M	958.30M
Balance Sheet
Total Assets	9.60B	9.74B	8.39B	7.63B	7.05B
Cash, Cash Equivalents and Short-Term Investments	510.30M	854.50M	477.80M	421.70M	23.30M
Total Debt	6.35B	6.35B	5.07B	4.59B	4.62B
Total Liabilities	8.07B	7.99B	6.64B	6.01B	5.23B
Stockholders Equity	1.52B	1.75B	1.75B	1.62B	1.82B
Cash Flow
Free Cash Flow	1.05B	1.14B	1.20B	1.24B	1.06B
Operating Cash Flow	1.05B	1.14B	1.20B	1.24B	1.07B
Investing Cash Flow	-674.30M	-1.72B	-1.42B	-460.60M	437.30M
Financing Cash Flow	-724.60M	957.30M	266.20M	-794.60M	-1.47B

Credit Acceptance Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 489.89
• 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 489.89 is above the 20-day moving average (MA) of 487.54, above the 50-day MA of 471.27, and above the 200-day MA of 482.99, indicating a bullish trend. The MACD of 7.62 indicates Positive momentum. The RSI at 52.18 is Neutral, neither overbought nor oversold. The STOCH value of 45.25 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
OMF	68 Neutral	$6.66B	8.66	23.76%	6.07%	9.51%	29.38%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
CACC	64 Neutral	$5.43B	13.31	28.14%	―	10.30%	154.64%
SLM	63 Neutral	$4.85B	6.91	32.31%	1.88%	0.59%	-1.11%
LC	61 Neutral	$1.87B	14.36	9.55%	―	9.68%	94.85%
AGM	57 Neutral	$1.86B	9.95	12.93%	3.40%	27.36%	12.55%
NAVI	47 Neutral	$931.19M	-11.61	-1.95%	4.95%	-25.22%	-174.34%

Credit Acceptance Corporate Events

Credit Acceptance Announces Retirement of Two Senior Officers

On January 20, 2026, Credit Acceptance Corporation announced that Chief Analytics Officer Arthur L. Smith and Chief Sales Officer Daniel A. Ulatowski had notified the company of their decisions to retire as officers and employees, effective February 1, 2026, and that both executives were expected to continue in consulting roles as non-employee advisors through July 31, 2026. Under anticipated separation and advisory agreements, Smith is expected to receive a monthly consulting fee of $66,758.01 and Ulatowski $64,166.67 during the advisory period, and in each case their retirements will be treated as qualifying retirements under the company’s incentive compensation plan, allowing their outstanding stock options to remain exercisable through their scheduled expiration date of December 30, 2026, which provides continuity in leadership transition and preserves equity incentives alignment during the handover period.

The most recent analyst rating on (CACC) stock is a Buy with a $522.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.

Credit Acceptance Extends and Reprices Term ABS Financing

On January 15, 2026, Credit Acceptance Corporation announced it had amended its existing $100 million asset-backed non-recourse secured financing, known as Term ABS 2021-1, originally entered into on January 29, 2021. The amendment extends the date on which the facility will cease to revolve from February 17, 2026 to January 18, 2028 and reduces the interest rate from SOFR plus 220 basis points to SOFR plus 140 basis points, with no other material changes to the terms. The extension and lower pricing enhance the company’s funding flexibility and reduce its cost of capital, supporting ongoing auto loan origination and reinforcing its position in the asset-backed financing market.

The most recent analyst rating on (CACC) stock is a Hold with a $513.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.

Credit Acceptance Completes $500M Asset-Backed Financing

On November 13, 2025, Credit Acceptance Corporation announced the completion of a $500 million asset-backed non-recourse secured financing. This transaction involved conveying consumer loans valued at approximately $625.2 million to a special purpose entity, which then transferred the loans to a trust that issued three classes of notes. The financing, which has an expected average annualized cost of 5.1%, will revolve for 24 months before amortizing based on loan cash flows. It aims to repay higher-cost debt and support general corporate purposes, while maintaining dealer relationships and preserving their rights to future payments. This marks Credit Acceptance’s 60th term securitization since 1998 and is noted as their lowest-cost ABS transaction since late 2021.

The most recent analyst rating on (CACC) stock is a Hold with a $475.00 price target. To see the full list of analyst forecasts on Credit Acceptance stock, see the CACC Stock Forecast page.