Credit Acceptance (NASDAQ:CACC) Issues Earnings Results

Credit Acceptance (NASDAQ:CACC) announced its quarterly earnings results on Thursday. The credit services provider reported $13.01 EPS for the quarter, topping the consensus estimate of $12.86 by $0.15, FiscalAI reports. The company had revenue of $420.30 million during the quarter, compared to analyst estimates of $596.40 million. Credit Acceptance had a return on equity of 33.00% and a net margin of 14.39%. The firm’s revenue was up 2.1% on a year-over-year basis. During the same period in the prior year, the firm posted $10.28 earnings per share.

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

• Positive Sentiment: Third-quarter growth accelerated, with consumer loan assignments up 38% year over year, dollar volume up 51%, and active dealers reaching a record 12,093. Economic profit rose 18% to $50.7 million, while economic profit per diluted share increased 30% to $4.87.
• Positive Sentiment: The company reported stronger commercial execution, expanded aggregator integrations, and higher volume per active dealer, contributing to market-share gains in its core subprime used-vehicle segment. Operating expenses fell 10% year over year despite increased investment in growth initiatives.
• Negative Sentiment: Credit Acceptance reduced forecasted collection rates for loans assigned from 2022 through 2026, resulting in a $291 million, or 2.5%, decline in forecasted net cash flows during the quarter. Management attributed most of the adjustment to underperformance in lower internal risk bands, though newer scorecard cohorts remain relatively unseasoned.
• Positive Sentiment: Adjusted net income increased 15% to $135.5 million, and the company repurchased $161.6 million of stock during the quarter. Liquidity stood at $1.2 billion, while a $600 million securitization achieved the company’s lowest credit spreads since late 2021, supporting continued loan growth.
• Neutral Sentiment: The company said agreements resolving New York and multistate regulatory matters should not materially affect its growth strategy or operating model. Management is continuing to invest in data, AI, digital servicing, and leadership capabilities to improve pricing, forecasting, dealer engagement, and consumer support.

Credit Acceptance Stock Down 19.3%

Shares of CACC opened at $464.89 on Friday. The business’s 50 day simple moving average is $564.30 and its 200-day simple moving average is $537.42. The company has a market capitalization of $4.86 billion, a P/E ratio of 15.18 and a beta of 1.40. The company has a debt-to-equity ratio of 3.84, a current ratio of 14.89 and a quick ratio of 14.89. Credit Acceptance has a one year low of $401.90 and a one year high of $668.86.

Credit Acceptance News Summary

Here are the key news stories impacting Credit Acceptance this week:

• Positive Sentiment: Credit Acceptance reported third-quarter adjusted earnings of $13.01 per diluted share, above the $12.86 analyst consensus and up from $10.28 a year earlier. Adjusted net income increased to $135.5 million from $117.9 million. Credit Acceptance Announces Third Quarter 2026 Results
• Positive Sentiment: The company highlighted continued business activity, including a record number of dealers, while quarterly revenue increased 2.1% year over year. These trends suggest underlying operating momentum despite the quarter’s headline accounting loss. Credit Acceptance Q3 2026: Record Dealers, but a Forecast Change Stings
• Neutral Sentiment: TD Cowen lowered its price target from $590 to $470 and maintained a Hold rating. The new target implies only about 1.1% upside from the referenced trading level, signaling limited near-term valuation support. TD Cowen Stock Recommendations
• Negative Sentiment: On a GAAP basis, Credit Acceptance posted a $56.6 million net loss, or $5.43 per share, versus $108.2 million of net income a year earlier. The large gap between GAAP and adjusted results may be weighing on investor confidence.
• Negative Sentiment: Reported revenue of approximately $594.6 million was slightly below the $596.4 million FactSet estimate, tempering the adjusted-EPS beat. Credit Acceptance Q3 Revenue Earnings Flash
• Negative Sentiment: Block & Leviton announced an investigation into potential securities-law violations and is soliciting investors who incurred losses. Although the investigation does not establish wrongdoing, it adds legal and reputational risk to the stock. CACC Securities Fraud Investigation

Analysts Set New Price Targets

A number of research analysts have issued reports on the company. Weiss Ratings reiterated a “buy (b-)” rating on shares of Credit Acceptance in a research report on Wednesday, October 14th. TD Cowen reduced their price objective on shares of Credit Acceptance from $590.00 to $470.00 and set a “hold” rating for the company in a report on Friday. One equities research analyst has rated the stock with a Buy rating and three have given a Hold rating to the company’s stock. According to data from MarketBeat.com, the company presently has an average rating of “Hold” and an average target price of $505.00.

Credit Acceptance Company Profile

Credit Acceptance Corporation (NASDAQ:CACC) is a specialized automobile finance company that provides financing programs for consumers who may have difficulty obtaining credit through traditional lenders. The company primarily operates through an indirect lending model, working with automobile dealers who offer financing to customers purchasing new or used vehicles.

Credit Acceptance purchases or services automotive loans originated through its dealer-partner network. Its programs are designed to help dealers sell vehicles to a broader range of consumers, while the company manages loan underwriting, servicing, collections, and related risk-management activities.