Credit Acceptance Q4 adjusted EPS beats analyst expectations

Overview

• Auto finance company's Q4 adjusted EPS beat analyst expectations

• Adjusted net income for Q4 exceeded analyst estimates

• Company repurchased $191.4 mln in shares, about 3.8% of shares outstanding

Outlook

• Company plans broader deployment of AI-powered call-center agents in 2026

• Credit Acceptance expects to expand dealer use of new contract origination experience in Q1 2026

• Company sees continued progress in product initiatives to improve dealer and consumer relationships

Result Drivers

• LOAN VOLUME DECLINE - Co reported a decline in loan volumes and performance, but highlighted resilience of its business model

• PRODUCT INITIATIVES - Co made progress on product initiatives to enhance dealer and consumer experiences, including digital credit applications and AI-powered call-center agents

• COLLECTION RATE DECLINE - Co experienced a moderate decline in forecasted collection rates, impacting forecasted net cash flows by $34.2 mln

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the consumer lending peer group is "buy."

• Wall Street's median 12-month price target for Credit Acceptance Corp is $466.00, about 7.5% above its January 28 closing price of $433.43

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 11 three months ago

Press Release: ID:nGNXbgHWcX

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