Credit Acceptance (CACC) AI Stock Analysis

• Market Cap: $5.10B
• Dividend Yield: N/A
• Average Volume (3M): 132.55K
• Price to Earnings (P/E): 12.2
• Beta (1Y): 1.18
• 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: 2.33
• Enterprise Value/Revenue: 5.24
• Enterprise Value/Gross Profit: 8.47
• Enterprise Value/Ebitda: 19.90
• 1Y Price Target: $430.00
• Price Target Upside: -6.95% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $509.00 ▲(10.15% Upside)

Credit Acceptance's overall stock score reflects solid financial performance and strategic corporate actions, such as asset-backed financing and leadership changes. However, technical indicators and earnings call sentiment highlight potential risks, including high leverage and competitive pressures. The stock's valuation is reasonable, but the lack of a dividend yield may deter income-focused investors.

Positive Factors

Asset-Backed Financing

This financing reduces higher-cost debt and supports corporate purposes, enhancing financial flexibility and operational stability.

New CEO Appointment

The new CEO's background in marketing and digital transformation is expected to drive innovation and improve customer service, strengthening market position.

Strong Liquidity Position

A strong liquidity position ensures operational stability and provides a cushion against economic volatility and industry challenges.

Negative Factors

High Leverage

High leverage can increase financial risk, especially if interest rates rise, potentially impacting long-term financial health.

Declining Loan Performance

Declining loan performance can reduce cash flows and profitability, affecting the company's ability to fund new loans and maintain growth.

Reduced Market Share

A reduced market share indicates competitive pressures, which can limit growth opportunities and weaken the company's market position.

Credit Acceptance Business Overview & Revenue Model

Company Description

Credit Acceptance Corporation (CACC) is a leading automobile finance company that specializes in providing financing solutions to consumers with subprime credit. The company operates primarily in the automotive sector, partnering with dealerships to offer retail financing options for vehicle purchases. Core products include indirect auto loans, which allow consumers to secure financing through participating dealerships, and a range of related services aimed at facilitating vehicle sales and enhancing the customer experience.

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

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	2.27B	2.13B	1.88B	1.82B	1.85B	1.67B
Gross Profit	1.40B	1.33B	1.26B	1.35B	1.43B	1.25B
EBITDA	597.70M	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	9.74B	8.39B	7.63B	7.05B	7.49B
Cash, Cash Equivalents and Short-Term Investments	607.70M	854.50M	477.80M	421.70M	23.30M	16.00M
Total Debt	0.00	6.35B	5.07B	4.59B	4.62B	4.70B
Total Liabilities	7.06B	7.99B	6.64B	6.01B	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: Positive
• Last Price: 462.11
• 50DMA: Positive
• 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 Positive. The current price of 462.11 is above the 20-day moving average (MA) of 459.84, above the 50-day MA of 460.84, and below the 200-day MA of 486.39, indicating a neutral trend. The MACD of 2.12 indicates Positive momentum. The RSI at 51.72 is Neutral, neither overbought nor oversold. The STOCH value of 26.34 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	79 Outperform	$8.04B	11.59	21.41%	6.11%	9.51%	29.38%
CACC	71 Outperform	$5.10B	12.23	28.14%	―	10.30%	154.64%
AGM	70 Outperform	$1.88B	10.08	13.72%	3.39%	27.36%	12.55%
LC	70 Outperform	$2.27B	22.11	7.40%	―	9.68%	94.85%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SLM	67 Neutral	$5.55B	9.64	27.85%	1.90%	0.59%	-1.11%
NAVI	55 Neutral	$1.28B	-24.48	-1.95%	4.89%	-25.22%	-174.34%

Credit Acceptance Corporate Events

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.

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.

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.

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.

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.

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.