Credit Acceptance Q3 Earnings Preview: Key Items Analysts Will Be Watching

Credit Acceptance Corporation +0.23%

Credit Acceptance Corporation




Auto finance company and one of the best workplaces for women, Credit Acceptance Corp (NASDAQ:CACC) will be reporting its third-quarter earnings, after market close on Oct 30. Analysts of the stock aren’t currently very positive on its outlook and will be closely watching key metrics mentioned below.

Credit Acceptance Q3 Earnings: What Analysts Will Watch Closely

Key items that analysts and investors in Credit Acceptance stock will be watching closely include:

  • Default rates & provisioning – the underwriting quality of new loans has been deteriorating (to protect top-line results) and the company’s current provisions seemingly insufficient to cover defaults on the upcoming ones.
  • Impact of higher interest rates environment – given the nature of its business, the high interest rate environment has already had an adverse impact on its financials, and shall continue to impact while rates remain high.

Earnings Estimates: Wall Street analysts expect CACC to report $5.71 in EPS for the quarter and $487.25 million in revenue, per earnings data available on Benzinga Pro. Given Credit Acceptance’s history of beating estimates, the Street expects CACC to record a beat on EPS and revenue this time as well.

Over the last 12 quarters, CACC stock has delivered 11 positive EPS surprises and 11 positive revenue surprises.

Analysts project that Credit Acceptance will report $38.10 in EPS for the fiscal year ending December 2023. Revenue estimates for that period are currently expected to come in at $1.91 billion.

Also Read: Earnings Outlook For Credit Acceptance

Analyst Ratings & Price Targets: Wall Street analyst ratings (based on a pool of 120 analyst firms over the last 3 years) currently rate the stock Equal Weight. The stock has seen more downgrades than upgrades since 2022. The consensus price target stands at $388.75 a share.

Price Action: Credit Acceptance shares are down over 15% over the past six months, and were trading 0.6% lower to $402.04 at the time of publication on Monday. The 52-week range is a low of $358.00 and a high of $576.05.

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