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Credit Acceptance
(NASDAQ:CACC)
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Rating:66Neutral
Price Target:
$710.00
▲(34.58% Upside)
Action:Reiterated
Date:06/16/26
The score is primarily driven by strong operating results and cash generation but meaningfully constrained by high leverage and some recent margin/FCF softening. Technicals are mildly supportive (above key longer-term moving averages with neutral momentum), valuation is favorable on a moderate P/E, and the latest earnings call was modestly positive but tempered by market share and forecast-risk concerns.
Positive Factors
Strong cash generation
Consistent, high cash conversion (OCF and FCF ~$1.05B) provides durable funding for origination and servicing, supports securitizations and interest coverage, and gives management flexibility to absorb credit cycles or reinvest in dealer programs without immediate equity raises.
Negative Factors
High leverage
Elevated leverage materially tightens financial flexibility and raises sensitivity to funding-cost shocks. With debt-to-equity above historical norms, the firm must sustain strong cash generation and market access to service obligations, limiting strategic optionality in adverse environments.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent, high cash conversion (OCF and FCF ~$1.05B) provides durable funding for origination and servicing, supports securitizations and interest coverage, and gives management flexibility to absorb credit cycles or reinvest in dealer programs without immediate equity raises.
Read all positive factors
Credit Acceptance (CACC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.87B
Dividend YieldN/A
Average Volume (3M)132.55K
Price to Earnings (P/E)16.0
Beta (1Y)1.41
Revenue Growth4.52%
EPS Growth72.48%
CountryUS
Employees2,291
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)40.99
Shares Outstanding10,460,071
10 Day Avg. Volume124,218
30 Day Avg. Volume132,546
Financial Highlights & Ratios
PEG Ratio0.13
Price to Book (P/B)3.22
Price to Sales (P/S)2.12
P/FCF Ratio4.67
Enterprise Value/Market Cap1.79
Enterprise Value/Revenue5.31
Enterprise Value/Gross Profit6.61
Enterprise Value/Ebitda14.73
Forecast
1Y Price Target
$520.00Price Target Upside-1.43% Downside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)48.15
Revenue Forecast (FY)$2.37B
Credit Acceptance Business Overview & Revenue Model
Company Description
Credit Acceptance Corporation engages in the provision of financing programs, and related products and services in the United States. It advances money to automobile dealers in exchange for the right to service the underlying consumer loans; and b...
How the Company Makes Money
CACC primarily makes money by financing and purchasing retail installment sales contracts (auto loans) that are originated through its network of participating automobile dealers, then earning returns as consumers repay those loans over time. The ...
Credit Acceptance Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call conveyed cautious optimism: the company delivered solid GAAP and adjusted earnings, demonstrated stabilization in loan cash flows and origination declines, executed a capital raise at attractive spreads, and showed tangible early benefits from AI and a new operating cadence. At the same time, management acknowledged persistent challenges — market share erosion in the core segment, per-dealer volume declines, sizable provisions driven by timing and prepayment uncertainty, and a workforce reduction to rebase costs. Overall the positives (earnings, improved cash-flow stability, capital access, technology and operating improvements) modestly outweigh the negatives, but the company remains disciplined and cautious given competitive and macro risks.Positive Updates
Strong GAAP and Adjusted Earnings
GAAP net income of $135.8M, or $12.40 per diluted share, and adjusted net income of $117.3M, or $10.71 per diluted share, representing year-over-year growth in earnings for the quarter.
Negative Updates
Decline in Core Market Share
Market share in core segment (used vehicles financed to subprime consumers) fell to 4.5% for the first two months of the quarter versus 5.2% in the comparable period of 2025, indicating competitive pressure and share loss.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong GAAP and Adjusted Earnings
GAAP net income of $135.8M, or $12.40 per diluted share, and adjusted net income of $117.3M, or $10.71 per diluted share, representing year-over-year growth in earnings for the quarter.
Read all positive updates
Company Guidance
Management's guidance was cautious but constructive: they said pricing adjustments and segmentation are beginning to bring greater predictability to the portfolio and that they remain disciplined while being "cautiously optimistic," pointing to the smallest quarterly decline in forecasted net cash flows in three years (down $9.1M, or 0.1%), moderated origination declines (unit volume -4.3% YoY; loan dollar volume -4% vs -11.3% in Q4), a steady adjusted loan portfolio of $8.9B, nearly 96,000 contracts financed, about $1.5B collected, $47M paid in dealer holdbacks, >1,500 new dealers added to a record 10,977 active dealers, core market share of 4.5% (down from 5.2% a year ago), average unit volume per active dealer -6.5% YoY, purchased loans at ~28% of originations (within a 20–40% historical range), a $450M ABS priced at a 5.2% all‑in cost (vs 5.1% in Q4) with the lowest credit spread since late 2021, a $54M provision for forecast changes this quarter, an AI-enabled call‑center agent handling ~5x more inbound calls QoQ, and a roughly 6% workforce reduction as part of broader cost‑discipline and operating‑rigor initiatives.Credit Acceptance Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
44
Neutral
Cash Flow
68
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.31B | 2.32B | 2.13B | 1.88B | 1.82B | 1.85B |
| Gross Profit | 1.86B | 2.29B | 1.33B | 1.26B | 1.35B | 1.43B |
| EBITDA | 833.50M | 1.06B | 352.90M | 373.90M | 727.90M | 1.28B |
| Net Income | 453.40M | 423.90M | 247.90M | 286.10M | 535.80M | 958.30M |
Balance Sheet | ||||||
| Total Assets | 8.69B | 9.60B | 9.74B | 8.39B | 7.63B | 7.05B |
| Cash, Cash Equivalents and Short-Term Investments | 25.70M | 510.30M | 854.50M | 477.80M | 421.70M | 23.30M |
| Total Debt | 6.41B | 6.35B | 6.35B | 5.07B | 4.59B | 4.62B |
| Total Liabilities | 7.18B | 8.07B | 7.99B | 6.64B | 6.01B | 5.23B |
| Stockholders Equity | 1.51B | 1.52B | 1.75B | 1.75B | 1.62B | 1.82B |
Cash Flow | ||||||
| Free Cash Flow | 1.05B | 1.05B | 1.14B | 1.20B | 1.24B | 1.06B |
| Operating Cash Flow | 1.06B | 1.05B | 1.14B | 1.20B | 1.24B | 1.07B |
| Investing Cash Flow | -574.80M | -674.30M | -1.72B | -1.42B | -460.60M | 437.30M |
| Financing Cash Flow | -1.05B | -724.60M | 957.30M | 266.20M | -794.60M | -1.47B |
Credit Acceptance Technical Analysis
Positive
527.56
Price Trends
556.30
Positive
515.76
Positive
491.36
Positive
Market Momentum
27.80
Negative
77.89
Negative
91.00
Negative
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 527.56 is below the 20-day moving average (MA) of 588.96, below the 50-day MA of 556.30, and above the 200-day MA of 491.36, indicating a bullish trend. The MACD of 27.80 indicates Negative momentum. The RSI at 77.89 is Negative, neither overbought nor oversold. The STOCH value of 91.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CACC.
Credit Acceptance Risk Analysis
Credit Acceptance disclosed 31 risk factors in its most recent earnings report. Credit Acceptance reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Credit Acceptance Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $2.13B | 11.52 | 13.01% | 3.40% | 21.73% | 7.16% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $6.87B | 8.81 | 23.62% | 6.07% | 7.80% | 42.28% | |
66 Neutral | $6.87B | 16.03 | 29.39% | ― | 4.52% | 72.48% | |
65 Neutral | $4.83B | 7.01 | 31.16% | 1.88% | 1.73% | 28.93% | |
48 Neutral | $809.25M | -14.11 | -2.45% | 4.95% | -20.89% | -217.55% |
* Financial Sector Average
CACC
Credit Acceptance
657.12
125.17
23.53%
AGM
Federal Agricultural
200.94
9.29
4.85%
SLM
SLM
25.60
-8.08
-23.98%
NAVI
Navient
8.61
-5.99
-41.03%
OMF
OneMain Holdings
59.50
4.35
7.89%
Credit Acceptance Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Credit Acceptance Extends and Lowers Cost of Credit Facility
Positive
Jun 15, 2026
Credit Acceptance Corporation, a specialty auto finance company that helps automobile dealers sell vehicles to consumers regardless of credit history, operates through a nationwide dealer network. Its programs aim to make vehicle ownership possibl...
Executive/Board Changes
Credit Acceptance Names New Chief Financial Officer
Neutral
Jun 10, 2026
Credit Acceptance announced on June 10, 2026 that Chief Financial Officer Jay D. Martin will retire as an officer and employee on July 27, 2026 after 23 years with the company, and will remain as an employee advisor through August 31, 2026 as part...
Executive/Board ChangesShareholder Meetings
Credit Acceptance Shareholders Back Board, Pay and Auditor
Positive
Jun 10, 2026
On June 10, 2026, Credit Acceptance held its Annual Meeting of Shareholders, where investors elected six directors to serve until the 2027 annual meeting, with all nominees receiving sufficient support despite varying levels of withheld votes. Sha...
Business Operations and StrategyPrivate Placements and Financing
Credit Acceptance Completes $450 Million Auto Loan Securitization
Positive
May 11, 2026
On May 5, 2026, Credit Acceptance Corporation completed a $450 million asset-backed non-recourse secured financing backed by approximately $562.6 million of consumer auto loans conveyed to a special purpose entity and then to a trust issuing three...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.