Company says monthly loan origination volume returned to year-over-year growth in June and July
Credit Acceptance expects further gains in call handling and unit economics as it scales AI servicing
Company says changes in forecasted collection rates for recent loans could significantly impact future cash flows
Overview
U.S. subprime auto lender's Q2 adjusted EPS and adjusted net income beat analyst expectations
Consumer loan assignment unit volume declined 1% while dollar volume was flat yr/yr
Company repurchased 2.5% of shares outstanding for $141.4 mln in Q2
Result drivers
Operating expenses - Lower general and administrative costs and reduced salaries and wages contributed to improved profitability
Credit loss provision - Lower provision for credit losses driven by smaller declines in consumer loan performance and changes in forecasted net cash flow timing
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the consumer lending peer group is "buy"
Wall Street's median 12-month price target for Credit Acceptance Corp is $575.00, about 0.4% above its August 3 closing price of $572.97
The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago
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