Credit Acceptance (CACC) AI Stock Analysis

• Market Cap: $5.62B
• Dividend Yield: N/A
• Average Volume (3M): 169.01K
• Price to Earnings (P/E): 20.7
• Beta (1Y): 1.19
• Revenue Growth: 13.77%
• EPS Growth: 20.95%
• Country: US
• Employees: 2,431
• Sector: Financial
• Sector Strength: 73
• Industry: Financial - Credit Services
• EPS (TTM): 9.35
• Shares Outstanding: 11,603,475
• 10 Day Avg. Volume: 281,760
• 30 Day Avg. Volume: 169,014
• PEG Ratio: -0.36
• Price to Book (P/B): 3.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.21
• Enterprise Value/Market Cap: 1.96
• Enterprise Value/Revenue: 1.31
• Enterprise Value/Gross Profit: 7.09
• Enterprise Value/Ebitda: 4.93
• 1Y Price Target: $477.50
• Price Target Upside: -1.49% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 75 Outperform
• Price Target: $545.00 ▲(12.44%Upside)

Credit Acceptance's overall stock score reflects strong financial performance and strategic commitments to growth, offset by mixed earnings call outcomes and technical indicators suggesting potential short-term volatility. The company's robust operational efficiency, zero debt, and focus on accessible vehicle financing highlight its strengths, while challenges in market share and cash flow growth warrant attention.

Positive Factors

Financial Performance

The level of deterioration in cash collections is slowing, which is expected to result in lower provisions and higher adjusted revenues and earnings.

Revenue

The beat was driven by lower provision, modestly higher revenue, and lower operating expenses.

Negative Factors

Cash Flow

CACC lowered its forecasted net cash flow rate for the eighth consecutive quarter.

Market Share

CACC's market share fell to 5.2% from 6.0%, which is a significant concern.

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 makes money through several key revenue streams. The primary source of revenue is the interest and fees charged on auto loans provided to consumers. The company purchases retail installment contracts from a network of automotive dealers, who sell vehicles to consumers and subsequently assign the loan contracts to Credit Acceptance. These contracts typically carry higher interest rates due to the subprime nature of the borrowers. Additionally, Credit Acceptance generates income from servicing fees and various other charges associated with the management and collection of these loans. The company's profitability is further supported by its underwriting and risk management practices, which are designed to mitigate potential losses from defaults. Partnerships with a wide array of dealerships across the U.S. enhance its market reach and contribute significantly to its earnings.

Credit Acceptance Financial Statement Overview

Summary

Credit Acceptance shows strong revenue growth and operational efficiency with high gross and EBIT margins. However, declining net profit margins and free cash flow growth present concerns. The balance sheet is strong with zero debt, but the equity ratio indicates moderate leverage.

Income Statement

Credit Acceptance has shown a strong revenue growth rate of 13.7% year-over-year from 2023 to 2024. The company maintained a high gross profit margin of 100%, indicating effective management of cost of goods. However, the net profit margin decreased from 15.0% to 11.5%, signifying increased expenses or other factors affecting net income. The EBIT margin showed a substantial increase from 23.1% to 76.8%, highlighting improved operational efficiency.

Balance Sheet

The balance sheet reveals a strong equity position with a debt-to-equity ratio of 0, indicating no debt burden as of 2024. The return on equity (ROE) is 14.2%, reflecting decent profitability relative to shareholder equity. The equity ratio stands at 19.8%, suggesting moderate leverage. While the lack of debt is a strength, the equity ratio indicates the need for careful management of equity financing.

Cash Flow

The company exhibited a slight decline in free cash flow from 2023 to 2024. Despite this, the operating cash flow to net income ratio is robust at 4.6, suggesting strong cash generation relative to net income. The free cash flow to net income ratio is high at 4.6, emphasizing efficient cash conversion. However, the negative trend in free cash flow growth rate may warrant attention.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.20B	2.13B	1.90B	1.18B	1.80B	1.62B
	Gross Profit
1.55B	1.33B	1.28B	709.40M	1.38B	1.20B
	EBIT
811.10M	325.10M	440.10M	686.10M	1.23B	540.50M
	EBITDA
246.10M	352.90M	373.90M	711.70M	1.26B	564.30M
	Net Income Common Stockholders
289.90M	247.90M	286.10M	535.80M	958.30M	421.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
528.80M	951.40M	13.20M	7.70M	23.30M	16.00M
	Total Assets
9.26B	8.85B	7.61B	6.90B	7.05B	7.49B
	Total Debt
0.00	6.35B	5.07B	4.59B	4.62B	4.61B
	Net Debt
6.18B	-845.00M	5.05B	4.58B	4.59B	4.59B
	Total Liabilities
7.55B	7.11B	5.86B	5.28B	5.23B	5.19B
	Stockholders Equity
1.71B	1.75B	1.75B	1.62B	1.82B	2.30B
Cash Flow		Free Cash Flow
1.17B	1.14B	1.20B	1.24B	1.06B	976.70M
	Operating Cash Flow
1.17B	1.14B	1.20B	1.24B	1.07B	985.20M
	Investing Cash Flow
-1.43B	-1.72B	-1.42B	-460.60M	437.30M	-673.50M
	Financing Cash Flow
807.70M	957.30M	266.20M	-794.60M	-1.47B	-433.20M

Credit Acceptance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 484.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• 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 484.71 is below the 20-day moving average (MA) of 491.65, below the 50-day MA of 487.24, and above the 200-day MA of 477.61, indicating a neutral trend. The MACD of 2.67 indicates Negative momentum. The RSI at 46.59 is Neutral, neither overbought nor oversold. The STOCH value of 57.49 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
CACC	75 Outperform	$5.62B	20.69	17.24%	―	13.77%	20.95%
JXN	69 Neutral	$5.82B	79.38	1.24%	3.93%	3.55%	8.91%
OMF	68 Neutral	$6.17B	10.98	17.46%	8.02%	9.07%	―
SLM	66 Neutral	$6.55B	11.24	27.60%	1.67%	-0.70%	-12.72%
Sector *	64 Neutral	$12.77B	9.71	7.85%	78.05%	12.07%	-7.97%
STEP	63 Neutral	$6.27B	103.13	-71.28%	4.75%	118.79%	-285.61%
LNC	62 Neutral	$5.54B	4.62	16.91%	5.54%	8.31%	-2.30%

Credit Acceptance Corporate Events

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.

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 Highlights Commitment to Accessible Vehicle Financing

The recent shareholder letter from Credit Acceptance highlights the company’s commitment to making vehicle ownership accessible to consumers with poor or no credit history. By partnering with dealers, Credit Acceptance has facilitated vehicle financing for individuals like Vivien H., who regained her independence after securing a vehicle loan. The company has also helped dealers like Nate W. expand their businesses by offering financing options to a broader customer base. Credit Acceptance’s business model, focused on economic profit and strong cultural values, has driven its success over the years, allowing it to consistently earn returns above its cost of capital and invest in its core business.