📊 CACC Key Takeaways
Investment Thesis
Credit Acceptance demonstrates strong operational performance with robust profitability (18.3% net margin, 27.8% ROE) and exceptional cash generation (45.4% FCF margin, $1.1B operating cash flow). However, the extremely high leverage (4.19x debt-to-equity) and thin interest coverage (1.2x) present material financial stress risk that limits upside potential despite solid earnings growth.
CACC Strengths
- Outstanding profitability with 18.3% net margin and 71% YoY net income growth
- Exceptional free cash flow generation at 45.4% FCF margin with $1.1B operating cash flow
- Strong return on equity of 27.8% demonstrates efficient capital deployment
- Consistent revenue growth of 7.2% YoY in stable consumer credit market
CACC Risks
- Dangerously high leverage at 4.19x debt-to-equity ratio ($6.4B debt vs $1.5B equity) creates refinancing and default risk
- Critically low interest coverage ratio of 1.2x indicates minimal cushion for debt service obligations
- Minimal cash reserves of $22.8M relative to $6.4B debt load limits financial flexibility
- Exposure to consumer credit downturn risk if macroeconomic conditions deteriorate
Key Metrics to Watch
- Interest coverage ratio trend - critical indicator of debt sustainability
- Debt-to-equity ratio and refinancing activities - monitor leverage reduction efforts
- Operating cash flow consistency - essential given high debt service obligations
- Loan portfolio quality and charge-offs - fundamental driver of credit risk
- ROE sustainability - confirm profitability gains are not at expense of credit quality
CACC Financial Metrics
💡 AI Analyst Insight
The 45.4% 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 Profitability Ratios
CACC vs Default Sector
How CREDIT ACCEPTANCE CORP compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
CACC Balance Sheet & Liquidity
CACC 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 Growth Metrics (YoY)
CACC Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| 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 |
| Q2 2023 | $457.4M | $22.2M | $1.69 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
CACC Capital Allocation
CACC SEC Filings
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 an AI rating of BUY with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are CACC's key strengths?
Outstanding profitability with 18.3% net margin and 71% YoY net income growth. Exceptional free cash flow generation at 45.4% FCF margin with $1.1B operating cash flow.
What are the risks of investing in CACC?
Dangerously high leverage at 4.19x debt-to-equity ratio ($6.4B debt vs $1.5B equity) creates refinancing and default risk. Critically low interest coverage ratio of 1.2x indicates minimal cushion for debt service obligations.
What is CACC's revenue and growth?
CREDIT ACCEPTANCE CORP reported revenue of $2.3B.
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 $36.38.
How is the AI analysis conducted?
Our AI (Claude) analyzes publicly available SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports to evaluate financial health, profitability ratios, balance sheet strength, and growth metrics.