Credit Acceptance Corporation (CACC - Free Report) fourth-quarter 2020 earnings of $9.43 per share comfortably outpaced the Zacks Consensus Estimate of $8.36. Also, the bottom line compares favorably with $8.60 earned in the prior-year quarter. The figure includes certain non-recurring items.
Increase in revenues and higher loan balance supported results. However, a slight rise in expenses was a headwind. Also, the company recorded an increase in provision during the quarter. Perhaps due to this, investors turned bearish toward the stock, which declined 2.8% in aftermarket trading.
Excluding non-recurring items, net income (non-GAAP basis) was $189.5 million or $10.75 per share, up from $173.5 million or $9.22 per share in the prior-year quarter.
In 2020, earnings per share of $23.47 per share declined 32.1% year over year but beat the consensus estimate of $22.62. Adjusted net income was $686.3 million or $38.26 per share, up from $658.4 million or $34.70 per share in 2019.
GAAP Revenues Increase, Expenses Rise
Quarterly total revenues were $447.4 million, up 15.9% year over year. The increase was largely driven by a rise in finance charges. Moreover, the figure beat the Zacks Consensus Estimate of $436.1 million.
In 2020, total revenues grew 12.1% to $1.67 billion. Also, the top line surpassed the consensus estimate of $1.66 billion.
Provision for credit losses was $92.6 million, up substantially from $27.2 million in the year-ago quarter.
Operating expenses of $84.5 million rose nearly 1%. Higher general and administrative costs lead to the increase.
As of Dec 31, 2020, net loans receivable amounted to $6.8 billion, up 1.5% from December 2019-level. Total assets were $7.5 billion as of the same date, up from $7.4 billion. Total stockholders’ equity was $2.3 billion, down 2.3% from December 2019 end.
Our Take
Credit Acceptance is well poised for revenue growth, as the economy gradually recovers and demand for consumer loans improves. However, elevated expenses pose a major headwind.
Currently, Credit Acceptance carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Consumer Loan Stocks
Ally Financial’s (ALLY - Free Report) fourth-quarter 2020 adjusted earnings of $1.60 per share handily surpassed the Zacks Consensus Estimate of $1.05. Also, the bottom line surged 68.4% from the year-ago figure.
Sallie Mae’s (SLM - Free Report) fourth-quarter 2020 earnings per share of $1.15 (on core basis) handily surpassed the Zacks Consensus Estimate of 33 cents. Also, the bottom line compared favorably with 33 cents reported in the prior-year quarter.
Navient Corporation (NAVI - Free Report) reported fourth-quarter 2020 core earnings per share of 88 cents that surpassed the Zacks Consensus Estimate of 81 cents. Also, the bottom line was above the year-ago quarter figure of 69 cents.
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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
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This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Credit Acceptance Corporation (CACC - Free Report) fourth-quarter 2020 earnings of $9.43 per share comfortably outpaced the Zacks Consensus Estimate of $8.36. Also, the bottom line compares favorably with $8.60 earned in the prior-year quarter. The figure includes certain non-recurring items.
Increase in revenues and higher loan balance supported results. However, a slight rise in expenses was a headwind. Also, the company recorded an increase in provision during the quarter. Perhaps due to this, investors turned bearish toward the stock, which declined 2.8% in aftermarket trading.
Excluding non-recurring items, net income (non-GAAP basis) was $189.5 million or $10.75 per share, up from $173.5 million or $9.22 per share in the prior-year quarter.
In 2020, earnings per share of $23.47 per share declined 32.1% year over year but beat the consensus estimate of $22.62. Adjusted net income was $686.3 million or $38.26 per share, up from $658.4 million or $34.70 per share in 2019.
GAAP Revenues Increase, Expenses Rise
Quarterly total revenues were $447.4 million, up 15.9% year over year. The increase was largely driven by a rise in finance charges. Moreover, the figure beat the Zacks Consensus Estimate of $436.1 million.
In 2020, total revenues grew 12.1% to $1.67 billion. Also, the top line surpassed the consensus estimate of $1.66 billion.
Provision for credit losses was $92.6 million, up substantially from $27.2 million in the year-ago quarter.
Operating expenses of $84.5 million rose nearly 1%. Higher general and administrative costs lead to the increase.
As of Dec 31, 2020, net loans receivable amounted to $6.8 billion, up 1.5% from December 2019-level. Total assets were $7.5 billion as of the same date, up from $7.4 billion. Total stockholders’ equity was $2.3 billion, down 2.3% from December 2019 end.
Our Take
Credit Acceptance is well poised for revenue growth, as the economy gradually recovers and demand for consumer loans improves. However, elevated expenses pose a major headwind.
Currently, Credit Acceptance carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Consumer Loan Stocks
Ally Financial’s (ALLY - Free Report) fourth-quarter 2020 adjusted earnings of $1.60 per share handily surpassed the Zacks Consensus Estimate of $1.05. Also, the bottom line surged 68.4% from the year-ago figure.
Sallie Mae’s (SLM - Free Report) fourth-quarter 2020 earnings per share of $1.15 (on core basis) handily surpassed the Zacks Consensus Estimate of 33 cents. Also, the bottom line compared favorably with 33 cents reported in the prior-year quarter.
Navient Corporation (NAVI - Free Report) reported fourth-quarter 2020 core earnings per share of 88 cents that surpassed the Zacks Consensus Estimate of 81 cents. Also, the bottom line was above the year-ago quarter figure of 69 cents.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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