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Credit Acceptance
(NASDAQ:CACC)
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Rating:73Outperform
Price Target:
$655.00
▲(14.10% Upside)
Action:Upgraded
Date:08/05/26
CACC scores well primarily on financial performance—strong cash generation, solid profitability, and sharply improved TTM revenue growth—supported by a constructive (though measured) earnings-call outlook and improving origination momentum. The score is moderated by mixed balance-sheet trend signals (historically high leverage vs. zero reported TTM debt) and currently lukewarm technical momentum (negative MACD and price below short-term averages). Valuation is reasonable at ~13.9x earnings, while corporate financing events modestly reinforce the liquidity/funding profile.
Positive Factors
Cash generation
Very strong and consistent operating cash flow (~$1.23B TTM) with free cash flow closely tracking net income provides durable internal funding for receivables, supports securitizations and revolver servicing, and gives management flexibility to absorb credit volatility while pursuing disciplined growth.
Negative Factors
Leverage history & discontinuity
A sharp discontinuity between historically high leverage and a TTM snapshot showing zero reported debt creates uncertainty about trend persistence; reliance on off‑balance securitizations and revolvers can reintroduce funding volatility and amplify earnings sensitivity to credit cycles if external markets tighten.
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Positive Factors
Negative Factors
Cash generation
Very strong and consistent operating cash flow (~$1.23B TTM) with free cash flow closely tracking net income provides durable internal funding for receivables, supports securitizations and revolver servicing, and gives management flexibility to absorb credit volatility while pursuing disciplined growth.
Read all positive factors
Credit Acceptance (CACC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.05B
Dividend YieldN/A
Average Volume (3M)132.55K
Price to Earnings (P/E)12.7
Beta (1Y)1.32
Revenue Growth2.58%
EPS Growth32.02%
CountryUS
Employees2,314
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)46.41
Shares Outstanding10,380,580
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$600.00Price Target Upside4.52% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)48.77
Revenue Forecast (FY)$2.36B
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:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call conveyed materially positive near-term financial results—strong GAAP and adjusted earnings growth, improving origination trends (monthly unit growth in June/July), record active dealer counts, modest loan-dollar growth, and strengthened liquidity—while acknowledging persistent but moderating credit and timing headwinds. Management emphasized disciplined, data-driven improvements (pricing, segmentation, AI tooling) and called the transformation early but showing tangible results. Key risks highlighted include slower-than-expected prepayments (continuing to pressure provisions), modest underperformance in the 2025 vintage, and unit/per-dealer activity still below peak. On balance, the positive operational momentum and significant earnings improvement outweigh the measured portfolio challenges.Positive Updates
Strong Earnings Growth
GAAP net income of $135.9M or $12.66 per diluted share, up 71% year-over-year. Adjusted net income of $130.1M or $12.12 per diluted share, up 21% year-over-year; improvement driven by decreased provision for credit losses and a nonrecurring $23M contingent loss in prior year.
Negative Updates
Forecasted Cash Flow Revision and Provision Headwinds
Undiscounted forecasted cash flows declined $39.1M (0.3%) in the quarter. The provision forecast change was cited as $82M, with a continuing headwind from slower-than-expected prepayments, which have been impacting provisions for multiple quarters.
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Q2-2026 Updates
Positive
Negative
Strong Earnings Growth
GAAP net income of $135.9M or $12.66 per diluted share, up 71% year-over-year. Adjusted net income of $130.1M or $12.12 per diluted share, up 21% year-over-year; improvement driven by decreased provision for credit losses and a nonrecurring $23M contingent loss in prior year.
Read all positive updates
Company Guidance
Management's guidance was cautiously optimistic and data‑driven: Q2 GAAP net income was $135.9M ($12.66/sh, +71% Y/Y) with adjusted net income $130.1M ($12.12/sh, +21% Y/Y); forecasted loan portfolio net cash flows declined $39.1M (0.3%) on roughly $12B of projected cash flows (vs a $55.8M, 0.5% decline a year ago) and provision forecast changes totaled ~$82M, driven mainly by slower‑than‑expected prepayments; origination unit volume was down 1% in Q2 (improving from –4.3% in Q1) while loan dollar volume was +0.1% (vs –4% in Q1), monthly unit volumes turned positive in June and July (July >+20% YoY, roughly back to 2024 levels), average units per active dealer were down 3.8% YoY, the company financed >84,000 contracts, added >1,400 new dealers and had >11,000 active dealers (record), collected >$1.4B and paid $43.5M in dealer holdback, maintained ≈$1.4B available on revolvers, reported the 2022 vintage as stable and the 2025 vintage within 10 bps of forecast, and expects advance rates to remain in historical ranges (around 46.1%) while prioritizing disciplined, profitable growth through segmentation and AI‑enabled decisioning.Credit Acceptance Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
66
Positive
Cash Flow
85
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.32B | 2.32B | 2.13B | 1.88B | 1.82B | 1.85B |
| Gross Profit | 2.08B | 2.29B | 1.33B | 1.26B | 1.35B | 1.43B |
| EBITDA | 897.00M | 1.06B | 352.90M | 373.90M | 727.90M | 1.28B |
| Net Income | 501.90M | 423.90M | 247.90M | 286.10M | 535.80M | 958.30M |
Balance Sheet | ||||||
| Total Assets | 8.62B | 9.60B | 9.74B | 8.39B | 7.63B | 7.05B |
| Cash, Cash Equivalents and Short-Term Investments | 1.40M | 510.30M | 854.50M | 477.80M | 421.70M | 23.30M |
| Total Debt | 6.29B | 6.35B | 6.35B | 5.07B | 4.59B | 4.62B |
| Total Liabilities | 7.03B | 8.07B | 7.99B | 6.64B | 6.01B | 5.23B |
| Stockholders Equity | 1.59B | 1.52B | 1.75B | 1.75B | 1.62B | 1.82B |
Cash Flow | ||||||
| Free Cash Flow | 1.22B | 1.05B | 1.14B | 1.20B | 1.24B | 1.06B |
| Operating Cash Flow | 1.23B | 1.05B | 1.14B | 1.20B | 1.24B | 1.07B |
| Investing Cash Flow | -552.00M | -674.30M | -1.72B | -1.42B | -460.60M | 437.30M |
| Financing Cash Flow | -744.70M | -724.60M | 957.30M | 266.20M | -794.60M | -1.47B |
Credit Acceptance Technical Analysis
Positive
574.08
Price Trends
594.47
Negative
550.22
Positive
507.56
Positive
Market Momentum
-4.87
Negative
50.11
Neutral
38.63
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 574.08 is below the 20-day moving average (MA) of 581.04, below the 50-day MA of 594.47, and above the 200-day MA of 507.56, indicating a neutral trend. The MACD of -4.87 indicates Negative momentum. The RSI at 50.11 is Neutral, neither overbought nor oversold. The STOCH value of 38.63 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $6.52B | 18.58 | 25.76% | ― | 17.65% | 43.92% | |
73 Outperform | $6.05B | 12.65 | 32.35% | ― | 2.58% | 32.02% | |
70 Outperform | $1.70B | 11.61 | 19.36% | 1.24% | 4.52% | -29.04% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $7.51B | 9.86 | 23.07% | 7.01% | 6.93% | 19.96% | |
55 Neutral | $3.01B | 48.97 | 7.85% | ― | 46.30% | ― |
* Financial Sector Average
CACC
Credit Acceptance
587.27
112.53
23.70%
PRG
PROG Holdings
42.62
9.69
29.42%
OMF
OneMain Holdings
65.68
12.36
23.18%
ENVA
Enova International
265.45
158.47
148.13%
UPST
Upstart Holdings
30.43
-33.66
-52.52%
Credit Acceptance Corporate Events
Business Operations and StrategyExecutive/Board Changes
Credit Acceptance announces planned CTO leadership transition
Neutral
Jul 24, 2026
On July 20, 2026, Credit Acceptance Corporation announced that its Board of Directors and Chief Technology Officer Ravi Mohan mutually agreed that he would resign from his CTO role effective August 14, 2026, and fully separate from the company on ...
Business Operations and StrategyExecutive/Board Changes
Credit Acceptance Announces Board Resignation and Size Reduction
Neutral
Jul 22, 2026
On July 21, 2026, Credit Acceptance Corporation announced that director Kenneth S. Booth resigned from its board, with the company stating his departure was not due to any disagreement with management or fellow directors. The board expressed appre...
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.