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Credit Acceptance (CACC) Down 15.6% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Credit Acceptance (CACC - Free Report) . Shares have lost about 15.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Credit Acceptance due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Credit Acceptance’s fourth-quarter 2022 earnings of $9.58 per share surpassed the Zacks Consensus Estimate of $7.71. The bottom line reflects a 34.4% fall from the prior-year quarter. These figures include certain non-recurring items. Our estimate for earnings was $6.35.
Results were aided by a marginal decline in operating expenses. Also, the rise in consumer loan assignment volumes acted as a tailwind. However, lower GAAP revenues and significantly higher provisions were the undermining factors.
Excluding non-recurring items, net income (non-GAAP basis) was $156.1 million or $11.74 per share compared with $212.6 million or $14.26 per share in the prior-year quarter. Our estimate for adjusted net income was $116.2 million.
GAAP earnings of $39.32 per share for 2022 beat the Zacks Consensus Estimate of $36.61. The bottom line reflects a 33.9% decline from 2021. Our estimate for earnings was $35.72.
GAAP Revenues & Operating Expenses Decline
Total quarterly GAAP revenues were $459 million, down 1% year over year. Lower finance charges mainly led to the revenue decline. The top line beat the Zacks Consensus Estimate of $436.4 million. Our estimate for revenues was $430.1 million.
Total GAAP revenues for 2022 were $1.83 billion, down 1.3% year over year. The top line beat the Zacks Consensus Estimate of $1.81 billion. Our estimate for revenues was $1.80 billion.
Provision for credit losses was $130.3 million, up significantly from $25.9 million in the year-ago quarter. Our estimate for the metric was $102.9 million.
Operating expenses of $103.9 million decreased marginally year over year.
As of Dec 31, 2022, net loans receivable were $6.30 billion, down marginally from the December 2021 level. Total assets were $6.90 billion as of the same date, down from $7.05 billion as of Dec 31, 2021. Total stockholders’ equity was $1.62 billion, down 11%.
In the quarter, consumer loan assignment volumes in terms of units and dollar volumes rose 25.6% and 26.2%, respectively, on a year-over-year basis.
Share Repurchase Update
In the reported quarter, Credit Acceptance repurchased 208,000 shares.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 9.43% due to these changes.
VGM Scores
Currently, Credit Acceptance has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Credit Acceptance has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Credit Acceptance (CACC) Down 15.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Credit Acceptance (CACC - Free Report) . Shares have lost about 15.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Credit Acceptance due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Credit Acceptance Q4 Earnings Beat Estimates, Costs Decline
Credit Acceptance’s fourth-quarter 2022 earnings of $9.58 per share surpassed the Zacks Consensus Estimate of $7.71. The bottom line reflects a 34.4% fall from the prior-year quarter. These figures include certain non-recurring items. Our estimate for earnings was $6.35.
Results were aided by a marginal decline in operating expenses. Also, the rise in consumer loan assignment volumes acted as a tailwind. However, lower GAAP revenues and significantly higher provisions were the undermining factors.
Excluding non-recurring items, net income (non-GAAP basis) was $156.1 million or $11.74 per share compared with $212.6 million or $14.26 per share in the prior-year quarter. Our estimate for adjusted net income was $116.2 million.
GAAP earnings of $39.32 per share for 2022 beat the Zacks Consensus Estimate of $36.61. The bottom line reflects a 33.9% decline from 2021. Our estimate for earnings was $35.72.
GAAP Revenues & Operating Expenses Decline
Total quarterly GAAP revenues were $459 million, down 1% year over year. Lower finance charges mainly led to the revenue decline. The top line beat the Zacks Consensus Estimate of $436.4 million. Our estimate for revenues was $430.1 million.
Total GAAP revenues for 2022 were $1.83 billion, down 1.3% year over year. The top line beat the Zacks Consensus Estimate of $1.81 billion. Our estimate for revenues was $1.80 billion.
Provision for credit losses was $130.3 million, up significantly from $25.9 million in the year-ago quarter. Our estimate for the metric was $102.9 million.
Operating expenses of $103.9 million decreased marginally year over year.
As of Dec 31, 2022, net loans receivable were $6.30 billion, down marginally from the December 2021 level. Total assets were $6.90 billion as of the same date, down from $7.05 billion as of Dec 31, 2021. Total stockholders’ equity was $1.62 billion, down 11%.
In the quarter, consumer loan assignment volumes in terms of units and dollar volumes rose 25.6% and 26.2%, respectively, on a year-over-year basis.
Share Repurchase Update
In the reported quarter, Credit Acceptance repurchased 208,000 shares.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 9.43% due to these changes.
VGM Scores
Currently, Credit Acceptance has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Credit Acceptance has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.