Credit Acceptance (CACC) Surges 7.0%: Is This an Indication of Further Gains?

Credit Acceptance CACC shares ended the last trading session 7% higher at $501.25. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.7% loss over the past four weeks.

Credit Acceptance stock rallied, driven by a massive jump in the broad markets. The jump was attributable to President Donald Trump’s announcement of a 90-day tariff pause for the non-retaliating nations. This cheered the investors, driving the CACC stock higher.

This auto financing company is expected to post quarterly earnings of $10.31 per share in its upcoming report, which represents a year-over-year change of +103%. Revenues are expected to be $568.15 million, up 11.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Credit Acceptance, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CACC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Credit Acceptance is part of the Zacks Financial - Consumer Loans industry. Ally Financial ALLY, another stock in the same industry, closed the last trading session 10.3% higher at $33.73. ALLY has returned -8.6% in the past month.

For Ally Financial

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

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