Fundamental analysis: Credit Acceptance Corporation (CACC)

Awarener score: 8.9

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Superb), the business stability (Excellent) and growth (Modest), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 7.0

Business growth has been almost stagnant. It's been almost average when measured against peer companies.
Credit Acceptance Corporation business trend stability is excellent. The higher the stability, the lower the risk. It looks well ranked against rivals.

Margins score: 10.0

CACC profit margins -on goods and services sold- are usually huge. They stand better than most rival companies.
Business profit on sales tends to be huge. It's top tier when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually huge. They remain in good shape compared to peers.
Earnings -before income taxes and interests on loans taken- tend to be huge in relation to total revenues. They're still well ranked against similar companies.
Profits -before income taxes- are usually huge considering total sales, and remain more than average in relation to rivals.
Total net profit tends to be huge when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 5.1

Credit Acceptance Corporation profit -on goods and services sold- has been growing at a normal pace. It's been close to average when compared to competitors.
In recent years, earnings -on operations- have been growing at a low step, which has been somewhat worse than comparable firms.
Profits -available to repay debt and purchase properties- have been growing at a very low pace, which compares below average when measured against peer enterprises.
Earnings -before income taxes and interests on loans taken- have been growing at a very low tempo. It turns to be close to average when compared to similar stocks.
In past years, profits -before income taxes- grew at a low speed. It was slightly worse than rivals.
In the previous years, growth on total net profit has been low, and almost average when measured against peer companies.
Earnings per share have grown at a good rhythm in past years. It's been close to average when compared to industry peers.

Miscellaneous score: 4.0

CACC had to pay substantial income taxes in relation to profits made in the past years. It's been mediocre against peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 9.8

Credit Acceptance Corporation usually gets huge returns on the resources it controls. It proves more than average in relation to peer firms.
The company normally gets huge proceeds -on the resources directly invested in the business-. They remain excellent in relation to similar companies.
Profitability -in relation to owned resources- is usually paramount. It ranks great when measured against competitors.
In the past, got excellent returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's encouraging in relation to comparable enterprises.

Usage of Funds score: 6.3

CACC usually uses a modest portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments isn't too high. It stands encouraging in relation to rival firms.
The company is usually replacing some proportion of the property, plant, and equipment that gets old, saving part of the funds for something else, which is almost average when measured against industry peers.
In the past twelve months the stock paid no dividends. It came bottom tier against competitors.
The company pays no dividend, so measuring its growth is meaningless. The company has behaved in an conservative way compared to similar firms.
As no dividends are paid, it is useless trying to estimate their sustainability in time. Sustainability looks not applicable in regard to comparable companies.
The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains excellent in relation to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in good shape compared to rivals.
The company uses a moderate portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn very sour. It still looks weak when measured against competitors.

Balance Sheet score: 6.3

Credit Acceptance Corporation has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
The company has plenty short-term resources to face short-term obligations. There're no liquidity concerns. It turns to be impressive in relation to similar firms.
Almost no resources controlled were provided for with financial debt. Financial strength is great. Company could significantly increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains well ranked against rival firms.
A substantial portion of resources controlled are already cash or short-term investments, which is better for liquidity. It looks great when measured against rivals.
For every dollar of short-term obligations, the company has plenty of dollars in cash and short-term receivables. It's impressive in relation to peer firms.
For every dollar of short-term obligations, the company has enough dollars in cash and equivalents, which is somewhat better than similar enterprises.
Usually, sales are on many months credit. It still ranks last-in-rank when measured against peers.
Normally has no inventories. It comes up as impressive in relation to competitors.
On average, it takes plenty of months from the purchase to charging customers. It happens to be bottom tier against peers.
Pays suppliers mostly in cash. It ranks last-in-rank when measured against industry peers.
The company pays its suppliers plenty of months before charging its customers, so there's a lot of money invested in working capital. It's a disappointment compared to similar companies.
To what extent normalized EBITDA covers interest expenses is not known. It stands impossible to compare against rival firms.
Business earnings have usually been great when measured against loans taken. Debt might be repaid almost as soon as desired. It ranks top tier when measured against comparable enterprises.
Revenues are huge in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements, allows the company to keep more money to reward stockholders in the long run. It looks excellent in relation to similar firms.
Resource exploitation is low when yearly sales are considered, business volume must be significantly increased. This metric is normally tied to the industry where the firm belongs. It's still slightly worse than peer companies.

Valuation score: 7.5

Credit Acceptance Corporation looks cheap in relation to profits and financial position. It happens to be encouraging in relation to competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
In the past twelve months, the company generated excellent free funds in relation to the stock price, which stands slightly better than similar companies.
The company usually generates plenty more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share looks to be very attractive. It's still encouraging in relation to industry firms.
In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up excellent in relation to peer ventures.
The company has more cash than debt. It might be poised to increase stockholder payments, or to fund new business projects. It looks somewhat better than similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation might be reasonable. It ranks almost average when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a high relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a very weak position compared to rival firms.
The relation between the stock price and accounting book value is significantly high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains somewhat worse than peer firms.
In the past twelve months, the operating business earned great money when compared to the current stock price and financial position. It happens to be encouraging in relation to industry peers.
In an alternate metric of bang for the buck, the company has usually shown an extreme earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be significantly undervalued. It's still a slight improvement compared to peer companies.

Total score: 7.0

Company at a glance: Credit Acceptance Corporation (CACC)

Sector, industry: Financial Services, Credit Services

Market Cap: 5.21 billions

Revenues TTM: 1.83 billions

Credit Acceptance Corporation provides financing programs, and related products and services to independent and franchised automobile dealers in the United States. The company advances money to dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps various amounts collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. The company was founded in 1972 and is headquartered in Southfield, Michigan.