Credit Acceptance (CACC) AI Stock Analysis

• Market Cap: $5.15B
• Dividend Yield: N/A
• Average Volume (3M): 115.98K
• Price to Earnings (P/E): 13.2
• Beta (1Y): 1.22
• Revenue Growth: 12.63%
• EPS Growth: 149.03%
• Country: US
• Employees: 2,431
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 8.56
• Shares Outstanding: 11,237,661
• 10 Day Avg. Volume: 117,993
• 30 Day Avg. Volume: 115,983
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.31
• Enterprise Value/Revenue: 5.31
• Enterprise Value/Gross Profit: 8.59
• Enterprise Value/Ebitda: 21.45
• 1Y Price Target: $511.00
• Price Target Upside: 11.46% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 69 Neutral
• Price Target: $552.00 ▲(20.40% Upside)

Credit Acceptance's overall stock score reflects solid financial performance and reasonable valuation, tempered by technical indicators suggesting a neutral trend. The mixed sentiment from the earnings call highlights both achievements and challenges, particularly in loan performance and market share.

Positive Factors

Revenue Growth

Stable revenue growth indicates resilience in the company's business model and its ability to maintain sales momentum despite market challenges.

Operational Efficiency

Improved EBIT and EBITDA margins suggest enhanced operational efficiency, which can lead to better profitability and competitive positioning.

Dealer Network Expansion

Expanding the dealer network enhances market reach and contract sourcing, supporting long-term growth in the automotive financing sector.

Negative Factors

High Leverage

High leverage increases financial risk, potentially impacting the company's ability to manage interest costs and maintain financial flexibility.

Decline in Loan Performance

Declining loan performance can affect cash flow and profitability, posing challenges to sustaining growth and managing credit risk effectively.

Market Share Decrease

Decreased market share indicates competitive pressures and may impact future growth prospects in the core subprime financing segment.

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	2.24B	2.13B	1.88B	1.82B	1.85B	1.67B
Gross Profit	1.38B	1.33B	1.26B	1.35B	1.43B	1.25B
EBITDA	554.70M	352.90M	373.90M	727.90M	1.28B	576.60M
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: 458.46
• 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 458.46 is below the 20-day moving average (MA) of 502.76, below the 50-day MA of 495.37, and below the 200-day MA of 494.03, indicating a bearish trend. The MACD of -6.40 indicates Positive momentum. The RSI at 34.01 is Neutral, neither overbought nor oversold. The STOCH value of 21.62 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	76 Outperform	6.96B	10.58	19.93%	7.11%	9.41%	13.98%
CACC	69 Neutral	$5.15B	13.22	27.30%	―	12.63%	149.03%
LC	67 Neutral	1.90B	25.81	3.83%	―	7.54%	70.26%
AGM	63 Neutral	1.84B	10.19	13.65%	3.41%	26.87%	3.35%
NAVI	59 Neutral	1.28B	39.50	1.33%	4.99%	-25.37%	-75.77%
SLM	58 Neutral	5.82B	14.09	28.16%	1.86%	-4.34%	-38.01%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

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.