Credit Acceptance CorporationCACC
NASDAQ • Financial Services
$522.13
P/E
12.74
PEG
0.46
FCF Yield
—
Rev Growth YoY
+3.1% YoY
Gross Margin
98.9%
Health Score
5/10
D/E Ratio
4.17
Confidence
LOW
Business Snapshot
Credit Acceptance Corporation operates in the financial credit services sector, providing auto financing solutions primarily to subprime borrowers through a network of dealer partnerships. The company generates revenue from loan interest and fee income on consumer loans originated through its indirect lending platform. It competes in the specialised subprime auto lending market, where it holds a niche leadership position due to its proprietary risk-assessment technology and long-standing dealer relationships. The business is defined by its high-margin model and significant free cash flow generation, with TTM revenue of $2.31 billion underscoring its financial scale.
Financial Health
Gross margin stands at 98.9%, essentially flat versus the prior year's 98.8%, while net margin is 19.5%, reflecting strong profitability despite the nature of subprime lending. The balance sheet is stretched: debt-to-equity of 4.17x indicates high leverage, and the current ratio of 0.26x signals acute short-term liquidity risk...
Risk Assessment
- DEBT / LIQUIDITY — Debt/equity of 4.17x significantly exceeds prudent levels, and the current ratio of 0.26x points to acute near-term liquidity strain, limiting financial flexibility.
- EARNINGS QUALITY — The company has beaten earnings estimates in 0 out of the last 4 quarters, raising concerns about management's visibility and the reliability of forecasting.
- REVENUE DECELERATION — QoQ revenue growth of 0.0% lags the YoY growth rate of 3.1%, indicating a potential stall in portfolio expansion.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed....