Credit Acceptance (NASDAQ:CACC) Sets New 1-Year High - What's Next?

Key Points

• Credit Acceptance shares hit a new 52-week high, trading as high as $589.46 before last changing hands at $595.24, up 2.9% on the day. The move came on relatively light volume of 27,071 shares.
• Analyst sentiment remains cautious overall, with several firms issuing or maintaining Hold-type ratings and a consensus price target of $520.00. Recent target increases from TD Cowen and Stephens suggest some improved expectations, but not a broad bullish shift.
• The company’s latest earnings missed estimates slightly, reporting $10.71 EPS versus $10.73 expected and revenue of $406.0 million versus $580.77 million forecast. Despite the miss, Credit Acceptance posted 29.95% return on equity and 19.49% net margin, while institutional ownership remains high at 81.71%.

Credit Acceptance Corporation (NASDAQ:CACC - Get Free Report)'s share price hit a new 52-week high during mid-day trading on Tuesday . The stock traded as high as $589.46 and last traded at $595.24, with a volume of 27071 shares traded. The stock had previously closed at $577.53.

Analyst Upgrades and Downgrades

Several research firms recently commented on CACC. Zacks Research lowered shares of Credit Acceptance from a "strong-buy" rating to a "hold" rating in a research note on Wednesday, May 13th. TD Cowen lifted their target price on shares of Credit Acceptance from $450.00 to $500.00 and gave the company a "hold" rating in a report on Wednesday, May 6th. Weiss Ratings upgraded Credit Acceptance from a "hold (c)" rating to a "hold (c+)" rating in a research note on Friday, May 8th. Finally, Stephens raised their price objective on Credit Acceptance from $450.00 to $540.00 and gave the company an "equal weight" rating in a research report on Friday, April 17th. Four investment analysts have rated the stock with a Hold rating, According to data from MarketBeat, Credit Acceptance currently has a consensus rating of "Hold" and a consensus price target of $520.00.

Credit Acceptance Trading Up 2.9%

The stock has a fifty day simple moving average of $538.17 and a 200 day simple moving average of $491.95. The company has a debt-to-equity ratio of 4.09, a quick ratio of 13.62 and a current ratio of 13.62. The firm has a market cap of $6.21 billion, a P/E ratio of 14.76 and a beta of 1.38.

Credit Acceptance (NASDAQ:CACC - Get Free Report) last announced its quarterly earnings results on Tuesday, May 5th. The credit services provider reported $10.71 EPS for the quarter, missing analysts' consensus estimates of $10.73 by ($0.02). The company had revenue of $406.00 million during the quarter, compared to the consensus estimate of $580.77 million. Credit Acceptance had a return on equity of 29.95% and a net margin of 19.49%.The business's revenue was up 1.6% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $9.35 earnings per share. On average, research analysts expect that Credit Acceptance Corporation will post 47.5 earnings per share for the current fiscal year.

Insider Buying and Selling at Credit Acceptance

In related news, insider Erin J. Kerber sold 1,753 shares of Credit Acceptance stock in a transaction on Wednesday, May 6th. The stock was sold at an average price of $551.62, for a total value of $966,989.86. Following the completion of the sale, the insider owned 25,711 shares of the company's stock, valued at $14,182,701.82. The trade was a 6.38% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Kenneth Booth sold 4,000 shares of the company's stock in a transaction on Monday, April 20th. The shares were sold at an average price of $534.00, for a total value of $2,136,000.00. Following the sale, the director owned 22,832 shares of the company's stock, valued at approximately $12,192,288. This trade represents a 14.91% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 26,527 shares of company stock worth $14,203,265. 6.10% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Credit Acceptance

Several hedge funds and other institutional investors have recently made changes to their positions in CACC. M&T Bank Corp purchased a new stake in Credit Acceptance during the fourth quarter valued at approximately $208,294,000. Boston Partners raised its holdings in Credit Acceptance by 3.4% in the 4th quarter. Boston Partners now owns 456,253 shares of the credit services provider's stock worth $202,373,000 after purchasing an additional 14,877 shares during the period. Dimensional Fund Advisors LP lifted its position in Credit Acceptance by 3.1% during the first quarter. Dimensional Fund Advisors LP now owns 230,715 shares of the credit services provider's stock valued at $97,701,000 after purchasing an additional 6,843 shares in the last quarter. Smead Capital Management Inc. lifted its position in Credit Acceptance by 17.0% during the second quarter. Smead Capital Management Inc. now owns 216,811 shares of the credit services provider's stock valued at $110,450,000 after purchasing an additional 31,438 shares in the last quarter. Finally, Universal Beteiligungs und Servicegesellschaft mbH grew its holdings in Credit Acceptance by 764.8% during the fourth quarter. Universal Beteiligungs und Servicegesellschaft mbH now owns 203,879 shares of the credit services provider's stock valued at $91,652,000 after purchasing an additional 180,304 shares during the period. Hedge funds and other 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.

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