## Credit Acceptance (CACC) Earnings Preview: What to Watch for on October 30th
Get ready for Credit Acceptance Corp. (CACC)’s upcoming earnings report, scheduled for Wednesday, October 30th. This release is a significant event for investors looking to gauge the health of the consumer finance company specializing in automobile loans. While analysts are anticipating an earnings per share (EPS) of $9.05, the real focus will likely be on the guidance for the next quarter and the company’s recent performance compared to its peers.
Past Performance and the Price Impact
Credit Acceptance’s recent earnings history has shown a mixed bag. The company beat EPS estimates in the previous quarter, but that resulted in a significant 14.89% drop in the share price on the following trading day. This illustrates the importance of not just earnings beats, but also the accompanying guidance, which reflects the company’s expectations for the future. Here’s a quick look at Credit Acceptance’s recent earnings performance and the resulting stock price changes:
| Quarter | EPS Estimate | EPS Actual | Price Change (%) |
|—|—|—|—|
| Q2 2024 | 8.91 | 10.29 | -15.0% |
| Q1 2024 | 8.35 | 9.28 | -4.0% |
| Q4 2023 | 5.43 | 10.06 | 7.00% |
| Q3 2023 | 5.71 | 10.70 | 1.0% |
Market Sentiment and Analyst Opinions
As of October 28th, Credit Acceptance shares were trading at $465.59, showing a positive 10.56% increase over the past 52 weeks. This positive trend suggests long-term shareholders might be bullish going into this earnings release. However, analysts have issued a “Sell” rating for Credit Acceptance, with an average one-year price target of $400.0, suggesting a potential 14.09% downside.
Analyzing Ratings Among Peers
To gain a comprehensive perspective, it’s crucial to compare Credit Acceptance’s performance to its key competitors. Let’s look at the analyst ratings and average one-year price targets for FirstCash Hldgs and Enova International, two prominent players in the industry:
*
FirstCash Hldgs:
Analysts project a “Buy” trajectory with an average one-year price target of $130.0, indicating a potential 72.08% downside.*
Enova International:
Analysts maintain a “Buy” status with an average one-year price target of $101.6, indicating a potential 78.18% downside.Snapshot: Peer Analysis
Here’s a summarized comparison of the key metrics for Credit Acceptance, FirstCash Hldgs, and Enova International:
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|—|—|—|—|—|
| Credit Acceptance | Sell | 12.42% | $330.70M | -2.94% |
| FirstCash Hldgs | Buy | 0.76% | $395.40M | 3.26% |
| Enova International | Buy | 25.13% | $323.45M | 3.73% |
Key Takeaways:
While Credit Acceptance boasts the highest Return on Equity among its peers, it lags behind in terms of Revenue Growth and Gross Profit margin. This suggests potential challenges in maintaining strong profitability and efficient asset utilization compared to its competitors.
All You Need to Know About Credit Acceptance
Credit Acceptance Corp. is a leading consumer finance company specializing in automobile loans. They operate through a nationwide network of automobile dealers, offering financing options to individuals who might not qualify for traditional loans. Their revenue primarily comes from finance charges, premiums from vehicle service contract reinsurance, and other fees. Finance charges are the most substantial source of revenue.
Financial Milestones: Credit Acceptance’s Journey
*
Market Capitalization:
Credit Acceptance’s market capitalization falls below industry averages, suggesting a smaller scale compared to its peers.*
Revenue Growth:
Over the past 3 months, Credit Acceptance has achieved a solid revenue growth rate of approximately 12.42%, surpassing the average growth rate within the Financials sector.*
Net Margin:
Credit Acceptance’s net margin is below industry averages (-8.87%), indicating potential challenges in maintaining strong profitability and efficient cost management.*
Return on Equity (ROE):
The company’s ROE of -2.94% lags behind industry averages, reflecting challenges in maximizing returns on equity capital.*
Return on Assets (ROA):
With an ROA of -0.58%, Credit Acceptance faces difficulties in efficiently utilizing its assets, indicating challenges in delivering satisfactory returns.*
Debt Management:
A high debt-to-equity ratio of 3.82 presents challenges in effectively managing debt levels, potentially leading to financial strain.Stay Informed
For all the latest earnings releases and information on Credit Acceptance, visit their earnings calendar. Keep an eye on this upcoming release on October 30th for insights into the company’s performance and future trajectory.
