The entity has beta of 0.85. Credit Acceptance returns are very sensitive to returns on the market. As market goes up or down, Credit Acceptance is expected to follow. This firm dividends can provide a clue to current valuation of the stock. Credit Acceptance is not expected to issue dividends this year as it trying to preserve or re-invest any of the funds available for distribution to stakeholders. Let me now analyze Credit Acceptance Price to Earnings To Growth. Based on latest financial disclosure the price to earnings to growth indicator of Credit Acceptance Corporation is roughly 0.71 times. This is 123.83% lower than that of the Financial Services sector, and 115.78% lower than that of
Credit Services industry, The Price to Earnings To Growth for all stocks is 85.48% higher than the firm.
There are currently many different techniques concerning forecasting the market as a whole as well as
predicting future values of individual securities such as Credit Acceptance. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the
market sentiment and impact your forecasting results.
Predictive Modules for Credit Acceptance
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Credit Acceptance's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Credit Acceptance. Your research has to be compared to or analyzed against Credit Acceptance's peers to derive any actionable benefits. When done correctly, Credit Acceptance's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Credit Acceptance.
How important is Credit Acceptance's Liquidity
Credit Acceptance
financial leverage refers to using borrowed capital as a funding source to finance Credit Acceptance ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Credit Acceptance financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Credit Acceptance's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Credit Acceptance's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Credit Acceptance's total debt and its cash.
Is Credit Acceptance valued correctly by the market?
Credit Acceptance reported previous year revenue of 1.13B. Net Income was 618.3M with profit before overhead, payroll, taxes, and interest of 1.05B. The current investor indifference towards the small price fluctuations of Credit Acceptance could raise concerns from investors as the firm closed today at a share price of
483.93 on
51319.000 in volume. The company management did not add any value to Credit Acceptance investors in
June. However, most investors can still diversify their portfolios with Credit Acceptance to hedge your portfolio against high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 1.3553. The below-average Stock volatility is a good sign for a longer term investment options and for buy-and-hold investors. Credit Acceptance preserves 71.19% of operating margin. Credit Acceptance is trading at 489.48. This is 0.83 percent increase. Today lowest is 483.93. Credit Acceptance Return on Invested Capital is somewhat stable at the moment. Also, Credit Acceptance Shareholders Equity USD is increasing over the last 4 years. The current value of Credit Acceptance Shareholders Equity USD is 769,998,395.
| 2008 | 2009 | 2018 | 2019 (projected) |
Credit Acceptance Interest Expense | 11,660,000 | 97,700,000 | 87,930,000 | 63,561,474 | Credit Acceptance Gross Profit | 172,071,000 | 969,200,000 | 872,280,000 | 1,050,000,000 |
To summarize, we see that Credit Acceptance Follows market closely. The company is
overvalued with
below average probability of bankruptcy within the next 24 months. Our present buy vs hold vs sell advice on the company is
Strong Hold.
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
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