Shares of Credit Acceptance Corporation CACC gained 5.8% in after-hours trading in response to better-than-expected fourth-quarter 2024 results. Earnings per share of $12.26 surpassed the Zacks Consensus Estimate of $6.82 by a considerable margin. Also, the bottom line surged 68.2% year over year.

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Results benefited from higher finance charges, growth in net loan receivables and decline in provisions. However, higher operating expenses posed a headwind.

Excluding the non-recurring items, adjusted net income was $126 million or $10.17 per share compared with $129.1 million or $10.06 per share in the prior-year quarter.

For 2024, earnings of $19.88 per share outpaced the consensus estimate of $14.47 but declined 9.6% year over year. Adjusted net income was $478.9 million or $38.41 per share, down from $535.6 million or $41.17 per share in 2023.

CACC’s GAAP Revenues Increase, Operating Expenses Rise

Total GAAP revenues for the reported quarter were $565.9 million, up 15.1% year over year. Increased finance charges and premiums earned supported revenue growth. The top line beat the Zacks Consensus Estimate of $562.4 million.

For 2024, total GAAP revenues grew 13.7% from the prior year to $2.16 billion. The top line met the consensus estimate.

Provision for credit losses was $123.4 million, down 24.6%. 

Operating expenses of $121.6 million increased 6.4%. 

As of Dec. 31, 2024, net loans receivables were $7.85 billion, up 12.9% from December 2023-end.

Total assets were $8.85 billion as of the same date, up from $7.61 billion as of Dec 31, 2023. Total shareholders’ equity was $1.75 billion, relatively stable.

Our Take on Credit Acceptance

Mounting expenses are expected to hurt Credit Acceptance’s bottom-line growth to an extent in the near term. Moreover, poor asset quality might hamper financials. Nevertheless, the company has been well-poised for revenue growth, given the gradual increase in demand for consumer loans.
 

Credit Acceptance Corporation Price, Consensus and EPS Surprise

Credit Acceptance Corporation price-consensus-eps-surprise-chart | Credit Acceptance Corporation Quote

Currently, Credit Acceptance carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of CACC’s Peers

Capital One’s COF fourth-quarter 2024 adjusted earnings of $3.09 per share handily surpassed the Zacks Consensus Estimate of $2.66. The bottom line also compared favorably with $2.24 in the prior-year quarter.

Results gained from higher net interest income and non-interest income and rise in loans and deposits. Also, provisions declined during the quarter. However, the increase in expenses was the undermining factor for COF.

Ally Financial’s ALLY fourth-quarter 2024 adjusted earnings of 78 cents per share handily surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line reflected a jump of 95% from the year-ago quarter.

ALLY’s results benefited from a rise in net finance revenues. Further, lower expenses and a decline in credit costs provided support. However, lower other revenues, and a decline in net finance receivables and loans and deposits were the undermining factors.

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