Credit Acceptance (CACC) AI Stock Analysis

• Market Cap: $5.76B
• Dividend Yield: N/A
• Average Volume (3M): 107.67K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 1.23
• Revenue Growth: 12.63%
• EPS Growth: 149.03%
• Country: US
• Employees: 2,431
• Sector: Financial
• Sector Strength: 77
• Industry: Financial - Credit Services
• EPS (TTM): 8.56
• Shares Outstanding: 11,237,661
• 10 Day Avg. Volume: 111,868
• 30 Day Avg. Volume: 107,667
• 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: 2.07
• Enterprise Value/Revenue: 5.31
• Enterprise Value/Gross Profit: 8.59
• Enterprise Value/Ebitda: 21.45
• 1Y Price Target: $470.00
• Price Target Upside: -9.56% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 69 Neutral
• Price Target: $528.00 ▲(1.60% Upside)

Credit Acceptance's overall score reflects solid financial performance and strategic corporate actions that enhance financial flexibility. However, technical indicators suggest potential bearish momentum, and challenges highlighted in the earnings call, such as declining loan performance and market share, introduce uncertainties. The valuation remains reasonable, supporting the stock's attractiveness despite these challenges.

Positive Factors

Revenue Performance

Revenue was better than estimates as average portfolio yield increased by 50 bps y/y.

Share Buybacks

Buybacks were strong in the quarter with $262mm, indicating confidence in the company's value.

Negative Factors

Financial Forecast

CACC decreased its forecasted collections by $55mm this quarter, driven by back-book underperformance.

Market Share

CACC's market share has declined to 5.4% in the first five months of 2025 from 6.6% for the same period in 2024.

Originations

Slowing originations, market share decline: Unit originations were down at -14.6% y/y, while dollar originations declined -18.8% y/y.

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: Positive
• Last Price: 519.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 519.7 is above the 20-day moving average (MA) of 489.84, above the 50-day MA of 501.01, and above the 200-day MA of 491.29, indicating a bullish trend. The MACD of 6.78 indicates Negative momentum. The RSI at 61.79 is Neutral, neither overbought nor oversold. The STOCH value of 81.83 is Negative, 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	76 Outperform	$7.26B	11.05	20.47%	6.71%	9.41%	13.98%
CACC	69 Neutral	$5.76B	14.98	27.30%	―	12.63%	149.03%
Sector *	68 Neutral	$17.88B	11.66	10.24%	3.76%	9.66%	1.70%
LC	67 Neutral	$1.97B	25.94	5.50%	―	7.54%	70.26%
AGM	66 Neutral	$2.20B	12.17	13.85%	2.83%	26.87%	3.35%
SLM	62 Neutral	$6.46B	15.64	18.99%	1.68%	-4.34%	-38.01%
NAVI	60 Neutral	$1.37B	42.27	1.28%	4.69%	-25.37%	-75.77%

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.

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.

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.

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.