TROW - Auto Loan Demand Aids Credit Acceptance Amid Cost Woes | Benzinga
Credit Acceptance Corporation (NASDAQ: CACC) is well-poised for top-line growth, supported by decent demand for auto loans, along with increases in dealer enrollments and active dealers. The company's share buyback policy also seems impressive.
However, elevated expenses will likely hurt the company's profitability to some extent. Weak credit quality and high debt levels are other concerns.
The Zacks Consensus Estimate for CACC's 2024 earnings has been unchanged over the past 30 days. Hence, the company currently carries a Zacks Rank #3 (Hold).
Over the past six months, shares of Credit Acceptance have gained 8.5% compared with the 18.6% growth of the industry.
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Looking at its fundamentals, supported by an increase in finance charges, Credit Acceptance's revenues witnessed a seven-year (2016-2023) compound annual growth rate (CAGR) of 10.1%, with the uptrend continuing in the first quarter of 2024.
In first-quarter 2024, finance charges accounted for 92.4% of total revenues. While finance charges are likely to witness headwinds from macroeconomic factors in the near term, the same will rebound ...