Value
7.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.8 |
| P/S | 7.2 |
| Fwd P/E | 9.4 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 8.9x
- ▸PEG: 0.11
- ▸Attractively valued
CACC · Why this verdict
Why Credit Acceptance (CACC) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.3/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Credit Acceptance is cheap at a forward P/E near 8.2x with a perfect 4-quarter beat streak, but the price is near the analyst target after a sharp gap down and leverage and short interest are high.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
CACC has beaten EPS estimates in 4 of the last 4 quarters, including a 4.25% surprise in the latest report. Earnings | EPS keeps beating consensus over 12 months. | ↑Improving |
| CounterBeats came on modest surprises and credit losses in subprime auto can rise quickly. | ||
Forward P/E is about 8.2x with a PEG of 0.32, labelled attractively valued. Valuation breakdown | Forward P/E stays under 10x. | ↓Deteriorating |
| CounterThe low multiple reflects subprime credit risk and leverage that the market is pricing in. | ||
Only about 1.8% upside remains to the analyst target, with reward-to-risk of 0.17. Warnings | The price holds near the target while estimates rise. | ↓Deteriorating |
| CounterThe extreme gap down of 13.5% may be an overreaction, with a rebound beyond the target. | ||
Leverage carries a 1.5-point penalty and short interest is 32%, with implied volatility of 128%. Key risks | Short interest falls below 20% as sentiment stabilizes. | ↓Deteriorating |
| CounterHigh short interest with quality of 7.5 could trigger a squeeze, so the risk is not one-sided. | ||
CACC has beaten EPS estimates in 4 of the last 4 quarters, including a 4.25% surprise in the latest report.
↑ImprovingEarnings
- Expectation
- EPS keeps beating consensus over 12 months.
CounterBeats came on modest surprises and credit losses in subprime auto can rise quickly.
Forward P/E is about 8.2x with a PEG of 0.32, labelled attractively valued.
↓DeterioratingValuation breakdown
- Expectation
- Forward P/E stays under 10x.
CounterThe low multiple reflects subprime credit risk and leverage that the market is pricing in.
Only about 1.8% upside remains to the analyst target, with reward-to-risk of 0.17.
↓DeterioratingWarnings
- Expectation
- The price holds near the target while estimates rise.
CounterThe extreme gap down of 13.5% may be an overreaction, with a rebound beyond the target.
Leverage carries a 1.5-point penalty and short interest is 32%, with implied volatility of 128%.
↓DeterioratingKey risks
- Expectation
- Short interest falls below 20% as sentiment stabilizes.
CounterHigh short interest with quality of 7.5 could trigger a squeeze, so the risk is not one-sided.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.6 |
| ROA | 2.6 |
| Gross margin | 10.0 |
| Op margin | 0.0 |
| Net margin | 10.0 |
| Current ratio | 5.0 |
| Moat | 5.8 |
| Piotroski F | 7.8 |
- ▸Strong margins: 32%
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| EPS growth | 10.0 |
Momentum
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 10.0 |
| vol acceleration | 5.5 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+2.1%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.1 |
| Analyst rating | 5.0 |
| Price target | 7.2 |
- ▸LLM news sentiment: -0.37 (n=6)
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 6.4 |
| growth rank | 0.0 |
Technical
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 8.0 |
| 52w position | 4.4 |
Risk (lower is worse)
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 1.7 |
| volatility | 0.0 |
| put call | 7.3 |
| implied vol | 0.0 |
| beta | 5.2 |
| debt equity | 0.2 |
| news risk | 5.0 |
- ▸Short squeeze setup: 32% short, quality 7.5
- ▸High IV: 92%
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.6 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:86d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.7<4.5
- ASYMMETRY:-0.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.15
Upside
-1.6%
Downside
10.7%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.46>1.3, MCap $4.9B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Growth at 10.0; weakest: Peer rank at 2.6. No conviction either direction.
The strongest dimensions are Growth at 10.0, Value at 7.7, and Technical at 7.5; the weakest are Peer rank at 2.6, Risk (lower is worse) at 3.7, and Momentum at 3.7. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.15 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Low Forward Multiple
Trip ifForward P/E rises above 11x.
- P3Limited Upside To Target
Trip ifUpside to the analyst target stays below 5% for 2 consecutive quarters.
- P4Leverage And Short Interest
Trip ifShort interest stays above 30% for 2 consecutive quarters.