📊 CACC Key Takeaways
Is Credit Acceptance Corp. (CACC) a Good Investment?
Credit Acceptance demonstrates strong operational profitability (30.2% operating margin, 23.4% net margin) and excellent free cash flow generation (59.6% FCF margin), but faces elevated financial risk from high leverage (4.22x Debt/Equity) and critically low interest coverage (1.6x), leaving minimal margin for profitability deterioration. Modest revenue growth (7.2% YoY) and weak returns on equity (9%) limit expansion appeal despite solid current cash generation.
Credit Acceptance shows strong current fundamental momentum, with revenue up 7.2% and net income up 71.0%, while operating cash flow and free cash flow remain exceptionally strong relative to revenue. Profitability is robust, including a 24.4% operating margin and 27.8% ROE, but the balance sheet is heavily levered and interest coverage of 1.2x leaves limited room if funding costs rise or credit performance weakens. The business looks fundamentally profitable, but the risk profile keeps the outlook balanced rather than clearly bullish.
Why Buy Credit Acceptance Corp. Stock? CACC Key Strengths
- Exceptional operating margins (30.2%) and net margins (23.4%) demonstrate strong pricing power and operational efficiency
- Outstanding free cash flow generation ($345.5M) with 59.6% FCF margin shows business converts earnings to cash effectively
- Recent diluted EPS growth of 83% YoY indicates improved profitability and earnings accretion
- Strong earnings momentum, with net income and diluted EPS growing much faster than revenue
- High cash generation, with roughly $1.05B in operating cash flow and free cash flow
- Solid profitability metrics, including 24.4% operating margin, 18.3% net margin, and 27.8% ROE
CACC Stock Risks: Credit Acceptance Corp. Investment Risks
- Interest coverage ratio of 1.6x is dangerously low, providing minimal buffer if profitability declines or rates increase
- Extreme leverage at 4.22x Debt/Equity combined with 6.4B in long-term debt creates financial fragility in stressed scenarios
- Slow revenue growth (7.2% YoY) and weak ROE (9%) suggest limited organic growth and modest capital efficiency
- High leverage, with debt/equity of 4.19x and $6.39B of long-term debt
- Thin interest coverage at 1.2x, which increases sensitivity to credit losses or higher funding costs
- Very low cash balance relative to liabilities, reducing near-term balance sheet flexibility
Key Metrics to Watch
- Interest coverage ratio trending higher above 2.0x to reduce financial risk
- Revenue growth acceleration above 10% YoY to validate expansion capacity
- Debt/Equity ratio trending lower toward 3.5x to reduce leverage exposure
- Interest coverage and funding costs
- Credit performance indicators such as net charge-offs and collections efficiency
Credit Acceptance Corp. (CACC) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 59.6% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
CACC Profit Margin, ROE & Profitability Analysis
CACC vs Finance Sector: How Credit Acceptance Corp. Compares
How Credit Acceptance Corp. compares to Finance sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Credit Acceptance Corp. Stock Overvalued? CACC Valuation Analysis 2026
Based on fundamental analysis, Credit Acceptance Corp. has mixed fundamental signals relative to the Finance sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Credit Acceptance Corp. Balance Sheet: CACC Debt, Cash & Liquidity
CACC Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Credit Acceptance Corp.'s revenue has grown significantly by 25% over the 5-year period, indicating strong business expansion. The most recent EPS of $21.99 reflects profitable operations.
CACC Revenue Growth, EPS Growth & YoY Performance
CACC Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $571.1M | $106.3M | $8.66 |
| Q3 2025 | $550.3M | $78.8M | $6.35 |
| Q2 2025 | $538.2M | $17.2M | $1.37 |
| Q1 2025 | $508.0M | $64.3M | $5.08 |
| Q3 2024 | $478.6M | $70.8M | $5.43 |
| Q2 2024 | $477.9M | $17.2M | $1.37 |
| Q1 2024 | $453.8M | $64.3M | $5.08 |
| Q3 2023 | $460.3M | $70.8M | $5.43 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Credit Acceptance Corp. Dividends, Buybacks & Capital Allocation
CACC SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Credit Acceptance Corp. (CIK: 0000885550)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CACC
What is the AI rating for CACC?
Credit Acceptance Corp. (CACC) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CACC's key strengths?
Claude: Exceptional operating margins (30.2%) and net margins (23.4%) demonstrate strong pricing power and operational efficiency. Outstanding free cash flow generation ($345.5M) with 59.6% FCF margin shows business converts earnings to cash effectively. ChatGPT: Strong earnings momentum, with net income and diluted EPS growing much faster than revenue. High cash generation, with roughly $1.05B in operating cash flow and free cash flow.
What are the risks of investing in CACC?
Claude: Interest coverage ratio of 1.6x is dangerously low, providing minimal buffer if profitability declines or rates increase. Extreme leverage at 4.22x Debt/Equity combined with 6.4B in long-term debt creates financial fragility in stressed scenarios. ChatGPT: High leverage, with debt/equity of 4.19x and $6.39B of long-term debt. Thin interest coverage at 1.2x, which increases sensitivity to credit losses or higher funding costs.
What is CACC's revenue and growth?
Credit Acceptance Corp. reported revenue of $580.0M.
Does CACC pay dividends?
Credit Acceptance Corp. does not currently pay dividends.
Where can I find CACC SEC filings?
Official SEC filings for Credit Acceptance Corp. (CIK: 0000885550) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CACC's EPS?
Credit Acceptance Corp. has a diluted EPS of $12.40.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is CACC a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Credit Acceptance Corp. has a HOLD rating with 74% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is CACC stock overvalued or undervalued?
Valuation metrics for CACC: ROE of 9.0% (sector avg: 12%), net margin of 23.4% (sector avg: 25%). Compare these metrics with sector averages to assess valuation.
Should I buy CACC stock in 2026?
Our dual AI analysis gives Credit Acceptance Corp. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is CACC's free cash flow?
Credit Acceptance Corp.'s operating cash flow is $346.8M, with capital expenditures of $1.3M. FCF margin is 59.6%.
How does CACC compare to other Finance stocks?
Vs Finance sector averages: Net margin 23.4% (avg: 25%), ROE 9.0% (avg: 12%), current ratio N/A (avg: 1.2).
Is Credit Acceptance Corp. carrying too much debt?
CACC has a debt-to-equity ratio of 4.22x, which is above the Finance sector average of 2x. Combined with a current ratio below 1, this warrants careful monitoring of the balance sheet.