CACC Up on Q4 Earnings Beat Despite Y/Y Rise in Expenses, Provisions

Shares of Credit Acceptance Corporation CACC gained 2.9% in the after-market trading following the release of the company’s better-than-expected fourth-quarter 2025 results. Adjusted earnings per share of $11.35 surpassed the Zacks Consensus Estimate of $10.30. Also, the bottom line increased 11.6% year over year.

Results were aided by an improvement in revenues. However, an increase in operating expenses and provisions hurt the results to some extent. 

Including non-recurring items, net income was $122 million or $10.99 per share compared with $151.9 million or $12.26 per share in the prior-year quarter.

CACC’s GAAP Revenues Improve, Operating Expenses Rise

Total GAAP revenues in the reported quarter were $579.9 million, up 2.5% year over year. Increased finance charges supported revenue growth. However, the top line marginally missed the Zacks Consensus Estimate of $580 million.

Quarterly provision for credit losses was $129.6 million, up 5% year over year. 

Total operating expenses of $162.3 million increased 33.5% from the prior-year quarter. 

As of Dec. 31, 2025, net loans receivable was $7.91 billion, up marginally from the end of December 2024.

Total assets were $8.63 billion as of the same date, down 2.5% from Dec. 31, 2024. Total shareholders’ equity was $1.52 billion, down 12.9% from Dec. 31, 2024.

Our Take on Credit Acceptance

Mounting expenses are expected to hurt CACC’s bottom-line growth. Moreover, weak asset quality because of a tough operating backdrop may 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 #3 (Hold). 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 fourth-quarter 2025 adjusted earnings per share of 39 cents, surpassing the Zacks Consensus Estimate of 31 cents. It reported earnings of 25 cents in the prior-year quarter.

NAVI’s results benefited from lower expenses and a slight decline in provisions for loan losses. However, a decrease in net interest income and other income acted as a headwind.

Capital One’s COF fourth-quarter 2025 adjusted earnings of $3.86 per share missed the Zacks Consensus Estimate of $4.12. However, the bottom line compared favorably with adjusted earnings of $3.09 in the prior-year quarter.

COF’s results were primarily hurt by an increase in expenses and higher provisions. However, an improvement in net interest income, along with higher non-interest income, offered support to some extent. Also, higher loan balances created a tailwind.

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

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