Credit Acceptance (NASDAQ:CACC) Corporation (NASDAQ:CACC) reported significantly lower earnings per share for Q3 2023, missing the consensus estimate. The company's per-share value of $5.43 fell short of the estimated $6.59, marking a 16.3% decrease from the same quarter in the previous year. This decline was mainly due to increased operating expenses and higher credit loss provisions.
The company's GAAP revenues saw a modest rise of 4%, reaching $478.6 million. However, this figure was still below the estimate of $485.7 million. Net income, excluding non-recurring items, dropped to $139.5 million or $10.70 per share.
Despite these challenges, Credit Acceptance experienced some positive growth in other areas. Net loans receivable increased by 10.7% to reach $6.78 billion, and consumer loan assignment volumes improved by 13% and 10.5%. Total assets and total shareholders’ equity also rose by 7.1% and 4.7% respectively, reaching $7.4 billion and $1.7 billion.
InvestingPro Insights
InvestingPro's real-time data reveals that Credit Acceptance Corporation (CACC) has an adjusted market capitalization of $5.09 billion and a P/E ratio of 15.48, indicating a fair valuation compared to earnings. The company's P/E ratio as of Q2 2023 was slightly higher at 15.72, suggesting a slight decrease in valuation over time. Furthermore, the company's revenue for the last 12 months as of Q2 2023 stood at $944.1 million, a decrease of 37.24% compared to the previous period.
InvestingPro Tips highlight some areas of concern for potential investors. Despite high earnings quality, with free cash flow exceeding net income, there is a declining trend in earnings per share. The stock is currently in oversold territory according to the Relative Strength Index (RSI), and 4 analysts have revised their earnings downwards for the upcoming period. Despite these challenges, the company remains profitable and stockholders receive high returns on book equity. For more detailed insights and tips, consider exploring InvestingPro's comprehensive suite of investment tools.
As of the latest data, InvestingPro offers 10 additional tips for Credit Acceptance Corporation (CACC) that could help investors make more informed decisions.
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