Credit Acceptance (NASDAQ:CACC) Announces Earnings Results, Misses Expectations By $0.08 EPS

Credit Acceptance (NASDAQ:CACC) posted its earnings results on Tuesday. The credit services provider reported $12.12 earnings per share for the quarter, missing analysts’ consensus estimates of $12.20 by ($0.08), FiscalAI reports. Credit Acceptance had a net margin of 21.54% and a return on equity of 31.93%. The firm had revenue of $415.00 million during the quarter, compared to the consensus estimate of $588.07 million. During the same period in the prior year, the company posted $10.05 EPS. The firm’s revenue was up .6% compared to the same quarter last year.

Here are the key takeaways from Credit Acceptance’s conference call:

• Second-quarter earnings improved significantly: GAAP net income rose 71% year over year to $135.9 million, or $12.66 per diluted share, while adjusted EPS increased 21% to $12.12, helped by higher yields on newer loans and lower credit-loss provisions.
• Origination trends are recovering. Unit volume declined just 1% in the quarter versus 4.3% in Q1, returned to year-over-year growth in June and July, and active dealers reached a second consecutive quarterly record above 11,000.
• Portfolio performance was described as increasingly stable, with forecasted net cash flows declining 0.3% during the quarter versus 0.5% a year earlier. However, the 2025 vintage showed modest underperformance, and slower-than-expected prepayments continued to pressure forecasts.
• Management is pursuing more targeted, profitable growth through dealer, vehicle and consumer segmentation, refined pricing models, AI-enabled tools and deeper integrations with dealer platforms. Early results from franchise-dealer initiatives and financing light structural-damage vehicles were encouraging, though the transformation remains at an early stage.
• The company ended the quarter with approximately $1.4 billion available under revolving credit facilities, while a senior leadership transition continues with Joe Billante becoming CFO following Jay Martin’s retirement. Management said core pricing personnel remain in place and emphasized disciplined capital allocation.

Credit Acceptance Stock Performance

Shares of CACC stock opened at $592.70 on Thursday. The stock has a market capitalization of $6.20 billion, a price-to-earnings ratio of 13.03 and a beta of 1.37. Credit Acceptance has a one year low of $401.90 and a one year high of $668.86. The company’s 50-day simple moving average is $593.45 and its 200-day simple moving average is $525.58. The company has a debt-to-equity ratio of 4.09, a quick ratio of 13.62 and a current ratio of 13.62.

Insider Transactions at Credit Acceptance

In related news, COO Jonathan Lum sold 6,000 shares of the stock in a transaction dated Wednesday, June 24th. The stock was sold at an average price of $600.00, for a total value of $3,600,000.00. Following the completion of the sale, the chief operating officer directly owned 31,609 shares of the company’s stock, valued at approximately $18,965,400. This represents a 15.95% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Erin J. Kerber sold 5,720 shares of the firm’s stock in a transaction dated Friday, June 26th. The stock was sold at an average price of $629.80, for a total value of $3,602,456.00. Following the sale, the insider owned 25,711 shares of the company’s stock, valued at $16,192,787.80. The trade was a 18.20% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 44,289 shares of company stock valued at $27,525,241 over the last 90 days. Corporate insiders own 6.10% of the company’s stock.

Hedge Funds Weigh In On Credit Acceptance

A number of large investors have recently made changes to their positions in CACC. Invesco Ltd. grew its position in Credit Acceptance by 32.6% during the fourth quarter. Invesco Ltd. now owns 19,304 shares of the credit services provider’s stock valued at $8,561,000 after buying an additional 4,747 shares during the period. Corient Private Wealth LLC raised its position in shares of Credit Acceptance by 33.6% in the 4th quarter. Corient Private Wealth LLC now owns 1,132 shares of the credit services provider’s stock worth $502,000 after acquiring an additional 285 shares in the last quarter. XTX Topco Ltd lifted its stake in shares of Credit Acceptance by 149.1% in the 4th quarter. XTX Topco Ltd now owns 1,704 shares of the credit services provider’s stock valued at $756,000 after purchasing an additional 1,020 shares during the period. Smith Thomas W purchased a new position in shares of Credit Acceptance in the 4th quarter valued at approximately $42,083,000. Finally, Cetera Investment Advisers boosted its position in shares of Credit Acceptance by 6.3% during the fourth quarter. Cetera Investment Advisers now owns 508 shares of the credit services provider’s stock valued at $225,000 after purchasing an additional 30 shares in the last quarter. Institutional investors and hedge funds own 81.71% of the company’s stock.

Analyst Ratings Changes

A number of brokerages have weighed in on CACC. Stephens upped their price objective on shares of Credit Acceptance from $450.00 to $540.00 and gave the stock an “equal weight” rating in a research report on Friday, April 17th. TD Cowen raised their target price on Credit Acceptance from $575.00 to $600.00 and gave the company a “hold” rating in a research report on Wednesday. Zacks Research lowered Credit Acceptance from a “strong-buy” rating to a “hold” rating in a research note on Wednesday, May 13th. Finally, Weiss Ratings raised Credit Acceptance from a “hold (c+)” rating to a “buy (b-)” rating in a report on Thursday, July 16th. One research analyst has rated the stock with a Buy rating and three have assigned a Hold rating to the stock. Based on data from MarketBeat.com, Credit Acceptance has an average rating of “Hold” and an average target price of $570.00.

Credit Acceptance Company Profile

Credit Acceptance Corporation, founded in 1972 and headquartered in Southfield, Michigan, is a specialty finance company focused on the indirect automotive lending market. The company partners with independent and franchised auto dealers to facilitate purchase financing for consumers who may not qualify for traditional prime auto loans. By purchasing retail installment contracts originated by these dealers, Credit Acceptance provides capital and credit insurance to support vehicle sales, enabling dealers to broaden their customer base and reduce credit risk.

Through its proprietary underwriting platform and risk management strategies, Credit Acceptance evaluates borrower applications, structures credit plans, and retains servicing rights on the acquired contracts.