Credit Acceptance (NASDAQ:CACC) Lowered to Hold Rating by Zacks Research

Key Points

• Zacks Research downgraded Credit Acceptance (NASDAQ:CACC) from a “strong-buy” to a “hold” rating, adding to a broader analyst picture that now shows a consensus Hold rating and a $520 average price target.
• The company recently reported quarterly earnings of $10.71 EPS, missing estimates by a small margin, while revenue came in at $406 million versus expectations of $580.77 million. Revenue still rose 1.6% year over year, and analysts expect full-year EPS of 47.5.
• Insider selling has been notable, with CFO Jay D. Martin and COO Jonathan Lum each selling 3,000 shares in April; insiders have sold 26,527 shares over the last 90 days.

Credit Acceptance (NASDAQ:CACC - Get Free Report) was downgraded by analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a note issued to investors on Wednesday,Zacks.com reports.

Several other research analysts have also commented on CACC. Weiss Ratings raised Credit Acceptance from a "hold (c)" rating to a "hold (c+)" rating in a research report on Friday, May 8th. Stephens lifted their price target on Credit Acceptance from $450.00 to $540.00 and gave the stock an "equal weight" rating in a research report on Friday, April 17th. Finally, TD Cowen lifted their price target on Credit Acceptance from $450.00 to $500.00 and gave the stock a "hold" rating in a research report on Wednesday, May 6th. Four equities research analysts have rated the stock with a Hold rating, According to MarketBeat, the stock currently has a consensus rating of "Hold" and a consensus target price of $520.00.

Credit Acceptance Price Performance

Shares of NASDAQ CACC opened at $546.66 on Wednesday. The company has a debt-to-equity ratio of 4.09, a quick ratio of 13.62 and a current ratio of 13.62. Credit Acceptance has a fifty-two week low of $401.90 and a fifty-two week high of $565.14. The firm has a market capitalization of $5.72 billion, a PE ratio of 13.58 and a beta of 1.36. The stock's 50-day simple moving average is $482.87 and its 200-day simple moving average is $470.55.

Credit Acceptance (NASDAQ:CACC - Get Free Report) last released its quarterly earnings results on Tuesday, May 5th. The credit services provider reported $10.71 EPS for the quarter, missing the consensus estimate of $10.73 by ($0.02). The firm had revenue of $406.00 million for the quarter, compared to analyst estimates of $580.77 million. Credit Acceptance had a return on equity of 29.95% and a net margin of 19.49%.The company's quarterly revenue was up 1.6% on a year-over-year basis. During the same period last year, the firm earned $9.35 EPS. As a group, equities research analysts forecast that Credit Acceptance will post 47.5 EPS for the current fiscal year.

Insiders Place Their Bets

In other news, CFO Jay D. Martin sold 3,000 shares of the business's stock in a transaction that occurred on Friday, April 17th. The stock was sold at an average price of $525.63, for a total value of $1,576,890.00. Following the transaction, the chief financial officer owned 25,963 shares of the company's stock, valued at approximately $13,646,931.69. The trade was a 10.36% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Jonathan Lum sold 3,000 shares of the business's stock in a transaction that occurred on Monday, April 20th. The shares were sold at an average price of $535.00, for a total value of $1,605,000.00. Following the completion of the transaction, the chief operating officer directly owned 31,609 shares in the company, valued at approximately $16,910,815. The trade was a 8.67% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 26,527 shares of company stock valued at $14,203,265. 6.10% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently modified their holdings of the stock. Pictet Asset Management Holding SA boosted its stake in shares of Credit Acceptance by 2.1% in the first quarter. Pictet Asset Management Holding SA now owns 990 shares of the credit services provider's stock valued at $419,000 after buying an additional 20 shares in the last quarter. Rockefeller Capital Management L.P. boosted its stake in shares of Credit Acceptance by 53.3% in the fourth quarter. Rockefeller Capital Management L.P. now owns 69 shares of the credit services provider's stock valued at $31,000 after buying an additional 24 shares in the last quarter. Janney Montgomery Scott LLC boosted its stake in shares of Credit Acceptance by 4.6% in the fourth quarter. Janney Montgomery Scott LLC now owns 571 shares of the credit services provider's stock valued at $253,000 after buying an additional 25 shares in the last quarter. Cetera Investment Advisers boosted its stake in shares of Credit Acceptance by 6.3% in the fourth quarter. Cetera Investment Advisers now owns 508 shares of the credit services provider's stock valued at $225,000 after buying an additional 30 shares in the last quarter. Finally, Russell Investments Group Ltd. boosted its stake in shares of Credit Acceptance by 5.3% in the third quarter. Russell Investments Group Ltd. now owns 721 shares of the credit services provider's stock valued at $337,000 after buying an additional 36 shares in the last quarter. Institutional investors and hedge funds own 81.71% of the company's stock.

About Credit Acceptance

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.

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