Credit Acceptance (NASDAQ:CACC) Shares Gap Down Following Weak Earnings

Key Points

• Credit Acceptance Corporation reported quarterly earnings of $8.56 per share, falling short of the consensus estimate of $9.84, resulting in a significant stock price gap down at opening.
• Insider sales included Daniel A. Ulatowski selling 6,356 shares valued at over $3.3 million, indicating a potential lack of confidence from company insiders.
• The firm experienced a 9.5% drop in stock price, with current trading at approximately $443.73 subsequent to the earnings report, despite an 8.5% year-over-year revenue increase.

Credit Acceptance Corporation (NASDAQ:CACC - Get Free Report)'s share price gapped down prior to trading on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $490.28, but opened at $450.00. Credit Acceptance shares last traded at $443.73, with a volume of 45,063 shares traded.

The credit services provider reported $8.56 earnings per share for the quarter, missing the consensus estimate of $9.84 by ($1.28). Credit Acceptance had a net margin of 13.03% and a return on equity of 28.60%. The business had revenue of $583.80 million during the quarter, compared to analyst estimates of $583.30 million. During the same quarter last year, the firm posted $10.29 earnings per share. The company's revenue was up 8.5% on a year-over-year basis.

Insider Buying and Selling

In other Credit Acceptance news, insider Daniel A. Ulatowski sold 6,356 shares of the company's stock in a transaction dated Wednesday, June 11th. The shares were sold at an average price of $522.16, for a total value of $3,318,848.96. Following the completion of the transaction, the insider directly owned 28,290 shares of the company's stock, valued at $14,771,906.40. This represents a 18.35% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, insider Andrew K. Rostami sold 375 shares of the company's stock in a transaction dated Friday, June 20th. The shares were sold at an average price of $505.29, for a total transaction of $189,483.75. Following the completion of the sale, the insider owned 25,478 shares in the company, valued at approximately $12,873,778.62. This trade represents a 1.45% decrease in their position. The disclosure for this sale can be found here. In the last three months, insiders sold 26,731 shares of company stock valued at $14,307,733. Company insiders own 5.30% of the company's stock.

Institutional Investors Weigh In On Credit Acceptance

A number of institutional investors have recently modified their holdings of the stock. New York State Common Retirement Fund raised its stake in Credit Acceptance by 0.7% during the first quarter. New York State Common Retirement Fund now owns 3,780 shares of the credit services provider's stock worth $1,952,000 after acquiring an additional 27 shares during the period. Linden Thomas Advisory Services LLC grew its position in Credit Acceptance by 2.8% in the 1st quarter. Linden Thomas Advisory Services LLC now owns 1,690 shares of the credit services provider's stock worth $873,000 after purchasing an additional 46 shares during the last quarter. Sierra Ocean LLC bought a new position in Credit Acceptance in the 1st quarter worth about $26,000. US Bancorp DE grew its position in Credit Acceptance by 35.8% in the 1st quarter. US Bancorp DE now owns 243 shares of the credit services provider's stock worth $125,000 after purchasing an additional 64 shares during the last quarter. Finally, Rhumbline Advisers grew its position in Credit Acceptance by 0.8% in the 1st quarter. Rhumbline Advisers now owns 9,122 shares of the credit services provider's stock worth $4,710,000 after purchasing an additional 70 shares during the last quarter. Institutional investors and hedge funds own 81.71% of the company's stock.

Credit Acceptance Stock Down 9.5%

The firm has a market capitalization of $5.15 billion, a P/E ratio of 18.94 and a beta of 1.15. The company has a debt-to-equity ratio of 3.92, a current ratio of 17.64 and a quick ratio of 17.64. The firm's fifty day moving average price is $505.61 and its 200-day moving average price is $498.18.

About Credit Acceptance

Credit Acceptance Corporation engages in the provision of financing programs, and related products and services in the United States. The company advances money to automobile dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps the amount collected from the consumers.

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