Credit Acceptance Corporation’s CACC first-quarter 2025 earnings per share of $8.66 lagged the Zacks Consensus Estimate of $10.31. However, the bottom line surged 70.5% year over year.

Results were hurt by an increase in operating expenses. On the other hand, higher finance charges, growth in net loan receivables and a fall in provisions were the tailwinds. Thus, investors were bullish on the stock, which rallied 2.6% in after-hours trading.

Excluding the non-recurring items, adjusted net income was $114.8 million or $9.35 per share compared with $117.4 million or $9.28 per share in the prior-year quarter.

CACC’s GAAP Revenues Up, Operating Expenses Rise

Total GAAP revenues for the reported quarter were $571.1 million, up 12.4% year over year. Increased finance charges and premiums earned supported revenue growth. Also, the top line beat the Zacks Consensus Estimate of $566.6 million.

Provision for credit losses was $161.9 million, down 13%. 

Operating expenses of $135.5 million increased 7.5%. 

As of March 31, 2025, net loans receivables were $7.98 billion, up 1.6% from December 2024-end.

Total assets were $9.26 billion as of the same date, up from $8.85 billion as of Dec 31, 2024. Total shareholders’ equity was $1.71 billion, down from $1.75 billion as of Dec 31, 2024.

Share Repurchase Update for CACC

During the reported quarter, Credit Acceptance repurchased roughly 0.32 million shares.

Our Take on Credit Acceptance

Mounting expenses are expected to hurt Credit Acceptance’s bottom-line growth. Moreover, weak asset quality because of a tough operating backdrop might hamper financials. However, the company is well-positioned 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of CACC’s Peers

Navient Corporation NAVI reported first-quarter 2025 adjusted earnings per share of 28 cents, handily surpassing the Zacks Consensus Estimate of 19 cents. It reported earnings of 63 cents in the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Navient’s results were driven by lower expenses. However, a rise in provision for loan losses and a decrease in net interest income (NII) were headwinds.

Capital One’s COF adjusted earnings of $4.06 per share handily surpassed the Zacks Consensus Estimate of $3.66. The bottom line also compared favorably with $3.21 in the prior-year quarter. 

COF’s results benefited from higher NII and non-interest income. Also, provisions declined during the quarter. However, the increase in expenses and lower loan balance were undermining factors.

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This article originally published on Zacks Investment Research (zacks.com).

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