Credit Acceptance (CACC) shares plunged 8.22% in pre-market trading on Friday, following the release of its disappointing second-quarter earnings report for 2025. The subprime auto lender's results, unveiled after market close on Thursday, revealed significant challenges in profitability and loan quality, triggering a sharp sell-off among investors.

The company reported earnings per share of $8.56, falling well short of analyst expectations of $10.16 and marking a 16.8% decrease from the previous year. While revenue slightly exceeded forecasts at $583.8 million, up 8.46% year-over-year, the positive revenue growth was overshadowed by alarming trends in the company's core business. Loan origination volumes dropped sharply, with unit and dollar assignments down 14.6% and 18.8% respectively, indicating a weakening portfolio quality.

Adding to investor concerns, TD Cowen analyst Moshe Orenbuch maintained a Sell rating on Credit Acceptance with a price target of $470.00. The analyst's pessimistic stance, coupled with the company's report of surging legal and administrative costs - which nearly doubled year-over-year - further fueled the stock's downward trajectory. As Credit Acceptance grapples with regulatory pressures and deteriorating loan performance, investors appear to be reassessing the company's near-term prospects, leading to the significant pre-market decline.