📊 CACC Key Takeaways
Is Credit Acceptance Corp. (CACC) a Good Investment?
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.
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
- 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
- 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
- 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
- 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 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
- 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 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 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 |
|---|---|---|---|
| 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.
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 BUY from Claude (BUY) and ChatGPT (HOLD) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CACC's key strengths?
Claude: 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. 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: 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. 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 $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?
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 April 2026, Credit Acceptance Corp. has a BUY rating with 74% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is CACC stock overvalued or undervalued?
Valuation metrics for CACC: ROE of 27.8% (sector avg: 12%), net margin of 18.3% (sector avg: 25%). Higher ROE suggests strong returns relative to peers.
Should I buy CACC stock in 2026?
Our dual AI analysis gives Credit Acceptance Corp. a combined BUY 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 $1.1B, with capital expenditures of $1.6M. FCF margin is 45.4%.
How does CACC compare to other Finance stocks?
Vs Finance sector averages: Net margin 18.3% (avg: 25%), ROE 27.8% (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 4.19x, which is above the Finance sector average of 2x. Combined with a current ratio below 1, this warrants careful monitoring of the balance sheet.
Why is CACC's return on equity (ROE) so high?
Credit Acceptance Corp. has a return on equity of 27.8%, significantly above the Finance sector average of 12%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 18.3% net margin.