CACC Stock Recent News

Credit Acceptance's (CACC) revenues will likely continue to improve, supported by the decent rise in dealer enrollments and active dealers. Yet, elevated costs might hurt profits.

Credit Acceptance Corporation (NASDAQ:CACC ) Q2 2023 Earnings Conference Call August 1, 2023 5:00 PM ET Company Participants Doug Busk - Chief Treasury Officer Ken Booth - CEO Jay Martin - SVP, Finance and Accounting Conference Call Participants Arjun Tuteja - Jarislowsky Fraser John Rowan - Janney Montgomery Scott Robert Wildhack - Autonomous Research Vincent Caintic - Stephens Ray Cheesman - Anfield Capital Management Operator Good day, everyone, and welcome to the Credit Acceptance Corporation's Second Quarter 2023 Earnings Call. Today's call is being recorded.

The headline numbers for Credit Acceptance (CACC) give insight into how the company performed in the quarter ended June 2023, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.

Credit Acceptance (CACC) came out with quarterly earnings of $1.69 per share, missing the Zacks Consensus Estimate of $9.44 per share. This compares to earnings of $7.94 per share a year ago.

Credit Acceptance, a subprime auto lender, is recommended as a sell due to structural issues and threats such as high interest rates and potential higher than expected default rates. The company's provisions for loan losses are deemed insufficient to cover upcoming defaults, with the quality of new originations believed to have deteriorated. Given the challenges ahead, on provisions, the macro environment, and limited top line growth, we initiate coverage with a SELL rating and a downside of around 20% to $450 per share.

“There are two kinds of forecasters: those who don't know, and those who don't know they don't know.” This Ken Galbraith's quote can't be more relevant when it comes to many stock investors obsessed with macro news recently (think inflation, interest rate, recession).

In one of his annual shareholder letters, Warren Buffett (Trades, Portfolio) compared three different growth stories – the great business (i.e., See's Candies) increases profits without significant capital investment; the good business (i.e.

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Credit Acceptance (CACC) reported earnings 30 days ago. What's next for the stock?

A rise in expenses and higher provisions hurt Credit Acceptance (CACC) Q1 earnings, while a decent loan demand and rising consumer loan assignments offer some support.