Credit Acceptance Corporation Common Stock (CACC)

FairStock Score: 58/100 — STEADY

Key Financials

Strengths

• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 25.9% demonstrating efficient capital deployment

Concerns

• Trades significantly above Graham Number ($342) with negative 53% margin of safety—limited downside protection
• High leverage at 4.17x debt-to-equity increases financial risk and interest expense burden

AI Analysis

Credit Acceptance Corporation Common Stock is a small-cap financial services company valued at $5.6 billion. The business generates $1.2 billion in annual revenue with a 9.9% net margin. From a quality standpoint, Credit shows solid Piotroski F-Score of 7/9 and Altman Z-Score of 1.9 in the grey zone. On valuation, the stock is attractively valued at 14.2x earnings, with trades above its Graham Number with a negative 53% margin. Growth dynamics show revenue growing at 2.9% and profit growth of -19.7%. Our composite FairStock Score of 58/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Credit's consistent 26% ROE at just 14x earnings—a re-rating toward sector peers could unlock 30-50% upside. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Elevated leverage at 4.2x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer