Credit Acceptance Corporation is a high-quality franchise with a wide economic moat, 36% net margins, a Piotroski score of 8 out of 9, and three consecutive earnings beats — the business fundamentals are strong. However, the stock has moved past its take-profit target, the momentum score has slipped below the minimum threshold, and 25% of the float remains short, creating a binary setup where the original entry thesis has been fulfilled and fresh capital faces an unattractive entry.
Thesis pillars
- High Short Interest Binary Risk↓Deteriorating
- High Leverage Limits Cushion↓Deteriorating
- Wide Moat Durable Franchise→Stable
- +2 more pillars — see the Why tab for full reasoning
Credit Acceptance Corporation (CACC) Stock Analysis
Temporary headwind edge
Financial Services · Credit Services
Hold if already holding. Not a fresh buy at $555.68, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Leverage penalty (D/E 4.0): -1.5.
Credit Acceptance Corporation provides auto financing programs through a nationwide network of ~60,000 dealers, enabling vehicle sales to consumers regardless of credit history; 79.5% of 2025 loan volume involved borrowers with FICO below 650 or no score. Finance charges —... Read more
Hold if already holding. Not a fresh buy at $555.68, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Leverage penalty (D/E 4.0): -1.5. Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Score 6.3/10, moderate confidence.
Passes 6/8 gates (clean insider activity, no SEC red flags, news events none recent, earnings proximity 34d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and favorable risk/reward ratio. Suitability: aggressive.
About Credit Acceptance Corporation
About Credit Acceptance Corporation
Credit Acceptance Corporation sourced $3.9 billion in Consumer Loan Assignments from 15,745 active dealers during 2025, with 79.5% of that volume involving borrowers with FICO scores below 650 or no FICO score. The company operates in a single reportable segment in the United States, generating 92.4% of total revenue from finance charges — primarily interest income on consumer loans — with vehicle service contract reinsurance premiums accounting for another 4.1%.
Credit Acceptance earns revenue through two programs. Under the Portfolio Program (74.2% of 2025 unit volume), the company advances money to dealers against anticipated future collections on consumer loans; after the advance is recovered, dealers receive a portion of collections as Dealer Holdback, aligning dealer incentives with collection quality, with a 20% servicing fee charged on all collections. Under the Purchase Program (25.8% of 2025 unit volume), the company purchases consumer loans outright with a one-time payment to the dealer. A wholly-owned subsidiary, VSC Re Company, reinsures vehicle service contracts sold through dealers, generating the 4.1% premium revenue share. The company's proprietary credit scoring system forecasts expected collection rates for each loan at assignment by evaluating credit bureau attributes, application data, vehicle information, and transaction structure, with performance monitored monthly. Competitors include buy-here-pay-here dealerships, banks, credit unions, captive finance affiliates, and independent finance companies.
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Credit cycle exposure is the defining structural risk for Credit Acceptance. The 10-K notes that in periods of economic slowdown or recession, delinquencies, defaults, repossessions, and losses may increase on consumer loans, and declining used-vehicle prices may weaken collateral coverage and increase loss severity. The company's entire revenue base depends on accurately forecasting collection rates on a portfolio where 79.5% of 2025 volume carried FICO scores below 650 or no score; if aggregate forecasts prove inaccurate, both finance charge income recognition and the allowance for credit losses would be materially affected. Tariff-driven increases in used car prices could further suppress dealer origination volumes by reducing consumer demand for automobiles.
See also: Financial Services · Credit Services
From Credit Acceptance Corporation's most recent 10-K filing, extracted June 9, 2026.
Recent developments
updated 2026-09-25Recent Developments — Credit Acceptance Corporation
Latest news
- NEWS Credit Acceptance (CACC) Stock Still Looks Below Fair Value As Caution Lingers - finance.yahoo.com — finance.yahoo.com neutral
- NEWS Credit Acceptance (CACC) Stock Still Looks Below Fair Value As Caution Lingers - Yahoo Finance — Yahoo Finance neutral
- NEWS Credit Acceptance (CACC) Could Be 11% Below Fair Value As Leadership Changes Take Shape - Yahoo Finance — Yahoo Finance negative
- NEWS Credit Acceptance (CACC) Could Be 11% Below Fair Value As Leadership Changes Take Shape - finance.yahoo.com — finance.yahoo.com positive
- NEWS A Look at Credit Acceptance Corp (CACC) After 3.1% Decline -- GF Value $611.88 vs Price $500.62 - GuruFocus — GuruFocus negative
Generated 2026-09-26T10:02:21Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMGeographicfive largest states10-K Item 1A: 'our five largest states...contained 29.2% of Dealers...significant amounts of Consumer Loan assignments will continue to be generated by Dealers in these five states'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
2 floor-breakers
Momentum below the gate floor. Component breakdown shows what dragged the score down.static
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $555.68, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Leverage penalty (D/E 4.0): -1.5. Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Target $608.54 (+9.5%), stop $527.87 (−5.3%), A.R:R -0.4:1. Score 6.3/10, moderate confidence.
Take-profit target: $608.54 (-2.6% upside). Target $608.54 (+9.5%), stop $527.87 (−5.3%), A.R:R -0.4:1. Stop-loss: $527.87.
Analyst target reached - limited upside remaining; Leverage penalty (D/E 4.0): -1.5; Negative momentum.
Credit Acceptance Corporation trades at a P/E of 12.3 (forward 10.0). TrendMatrix value score: 7.8/10. Verdict: Hold.
8 analysts cover CACC with a consensus score of 2.4/5. Average price target: $637.
What does Credit Acceptance Corporation do?Credit Acceptance Corporation provides auto financing programs through a nationwide network of ~60,000 dealers,...
Credit Acceptance Corporation provides auto financing programs through a nationwide network of ~60,000 dealers, enabling vehicle sales to consumers regardless of credit history; 79.5% of 2025 loan volume involved borrowers with FICO below 650 or no score. Finance charges — primarily interest income — accounted for 92.4% of fiscal 2025 revenue across $3.9 billion in consumer loan assignments.