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Credit Acceptance (CACC) Up 3.8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Credit Acceptance (CACC - Free Report) . Shares have added about 3.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Credit Acceptance due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Credit Acceptance’s second-quarter 2023 earnings of $1.69 per share missed the Zacks Consensus Estimate of $9.44 by a significant margin. The bottom line also reflects a 78.7% fall from the prior-year quarter. These figures include certain non-recurring items.
Results were adversely impacted by a marginal increase in operating expenses and higher provisions for credit losses. However, the rise in GAAP revenues and consumer loan assignment volume acted as a tailwind.
Excluding non-recurring items, net income was $140 million or $10.69 per share, down from $188.2 million or $13.92 per share in the prior-year quarter. Our estimates for adjusted net income and adjusted earnings per share were $158.5 million and $12.15 per share, respectively.
GAAP Revenues & Operating Expenses Rise
Total GAAP revenues were $477.9 million, up 4.5% year over year. The increase in finance charges, premiums earned and other income mainly resulted in the revenue growth. The top line surpassed the Zacks Consensus Estimate of $462.7 million.
Provision for credit losses was $250.5 million, up 69.8% from $147.5 million in the year-ago quarter.
Operating expenses of $117 million marginally increased year over year.
As of Jun 30, 2023, net loans receivable were $6.61 billion, up 5% from the December 2022 level. Our estimate for the metric was the same as the reported numbers. Total assets were $7.21 billion as of the same date, up 4.4%. Our estimate for total assets was $7.25 billion. Total shareholders’ equity was $1.75 billion, up 7.6%. Our estimate for the same was $1.68 billion.
In the reported quarter, consumer loan assignment volumes in terms of units and dollar volumes rose 12.8% and 8.3%, respectively, on a year-over-year basis.
Share Repurchase Update
In the reported quarter, Credit Acceptance repurchased 16,226 shares.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted 36.85% due to these changes.
VGM Scores
Currently, Credit Acceptance has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Credit Acceptance has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Credit Acceptance (CACC) Up 3.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Credit Acceptance (CACC - Free Report) . Shares have added about 3.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Credit Acceptance due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Credit Acceptance Q2 Earnings Miss, Provisions Rise
Credit Acceptance’s second-quarter 2023 earnings of $1.69 per share missed the Zacks Consensus Estimate of $9.44 by a significant margin. The bottom line also reflects a 78.7% fall from the prior-year quarter. These figures include certain non-recurring items.
Results were adversely impacted by a marginal increase in operating expenses and higher provisions for credit losses. However, the rise in GAAP revenues and consumer loan assignment volume acted as a tailwind.
Excluding non-recurring items, net income was $140 million or $10.69 per share, down from $188.2 million or $13.92 per share in the prior-year quarter. Our estimates for adjusted net income and adjusted earnings per share were $158.5 million and $12.15 per share, respectively.
GAAP Revenues & Operating Expenses Rise
Total GAAP revenues were $477.9 million, up 4.5% year over year. The increase in finance charges, premiums earned and other income mainly resulted in the revenue growth. The top line surpassed the Zacks Consensus Estimate of $462.7 million.
Provision for credit losses was $250.5 million, up 69.8% from $147.5 million in the year-ago quarter.
Operating expenses of $117 million marginally increased year over year.
As of Jun 30, 2023, net loans receivable were $6.61 billion, up 5% from the December 2022 level. Our estimate for the metric was the same as the reported numbers. Total assets were $7.21 billion as of the same date, up 4.4%. Our estimate for total assets was $7.25 billion. Total shareholders’ equity was $1.75 billion, up 7.6%. Our estimate for the same was $1.68 billion.
In the reported quarter, consumer loan assignment volumes in terms of units and dollar volumes rose 12.8% and 8.3%, respectively, on a year-over-year basis.
Share Repurchase Update
In the reported quarter, Credit Acceptance repurchased 16,226 shares.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted 36.85% due to these changes.
VGM Scores
Currently, Credit Acceptance has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Credit Acceptance has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.