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

Credit Acceptance (NASDAQ:CACC) announced its quarterly earnings data on Tuesday. The credit services provider reported $12.12 EPS for the quarter, missing analysts’ consensus estimates of $12.20 by ($0.08), FiscalAI reports. Credit Acceptance had a net margin of 19.49% and a return on equity of 29.95%. The company had revenue of $415.00 million for the quarter, compared to analysts’ expectations of $588.07 million. During the same period in the previous year, the firm posted $10.05 earnings per share. The business’s revenue for the quarter was up .6% on a year-over-year basis.

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 NASDAQ CACC opened at $587.85 on Wednesday. Credit Acceptance has a 12 month low of $401.90 and a 12 month high of $668.86. The company has a quick ratio of 13.62, a current ratio of 13.62 and a debt-to-equity ratio of 4.09. The company has a market cap of $6.15 billion, a P/E ratio of 14.61 and a beta of 1.37. The business’s 50 day moving average is $592.66 and its two-hundred day moving average is $524.74.

Wall Street Analysts Forecast Growth

Several analysts recently issued reports on CACC shares. Zacks Research lowered Credit Acceptance from a “strong-buy” rating to a “hold” rating in a report on Wednesday, May 13th. TD Cowen raised their price target on Credit Acceptance from $500.00 to $575.00 and gave the stock a “hold” rating in a research note on Tuesday, July 7th. Stephens boosted their price target on Credit Acceptance from $450.00 to $540.00 and gave the company an “equal weight” rating in a research note on Friday, April 17th. Finally, Weiss Ratings raised shares of Credit Acceptance from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Thursday, July 16th. One analyst has rated the stock with a Buy rating and three have assigned a Hold rating to the company. According to MarketBeat, the company has an average rating of “Hold” and a consensus target price of $557.50.

Insider Buying and Selling at Credit Acceptance

In other Credit Acceptance news, COO Jonathan Lum sold 6,000 shares of the firm’s stock in a transaction that occurred on 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 owned 31,609 shares in the company, valued at approximately $18,965,400. This trade represents a 15.95% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Jill Foss Watson sold 11,000 shares of the company’s stock in a transaction on Thursday, July 2nd. The shares were sold at an average price of $653.24, for a total value of $7,185,640.00. Following the completion of the transaction, the insider owned 49,346 shares of the company’s stock, valued at $32,234,781.04. The trade was a 18.23% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 44,289 shares of company stock valued at $27,525,241 in the last three months. 6.10% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Kestra Advisory Services LLC bought a new position in shares of Credit Acceptance during the 4th quarter worth approximately $27,000. State of Wyoming bought a new position in shares of Credit Acceptance during the fourth quarter valued at $27,000. Vestcor Inc acquired a new stake in shares of Credit Acceptance in the 3rd quarter valued at $50,000. Raymond James Financial Inc. bought a new stake in shares of Credit Acceptance in the 2nd quarter worth about $150,000. Finally, Prudential Financial Inc. acquired a new stake in shares of Credit Acceptance during the 2nd quarter worth about $215,000. Institutional investors own 81.71% of the company’s stock.

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.