It has been about a month since the last earnings report for Credit Acceptance (CACC). Shares have lost about 4.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Credit Acceptance due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Credit Acceptance Q4 Earnings Beat, Revenue Rise Y/Y

Credit Acceptance’s fourth-quarter 2023 earnings of $7.29 per share surpassed the Zacks Consensus Estimate of $4.52 by a significant margin. However, the bottom line reflects a 23.9% fall from the prior-year quarter. These figures include certain non-recurring items.

Results were aided by an improvement in GAAP revenues and consumer loan assignment volumes. However, higher operating expenses and provisions were the undermining factors.

Excluding non-recurring items, net income was $129.1 million or $10.06 per share, down from $156.1 million or $11.74 per share in the prior-year quarter.

For 2023, earnings per share of $21.99 surpassed the Zacks Consensus Estimate of $19.38. The bottom line declined 44.1% from the previous year. Excluding non-recurring items, net income was $535.6 million or $41.17 per share, down from $720.1 million or $52.85 per share in 2022.

GAAP Revenues Improve, Operating Expenses Rise

Total quarterly GAAP revenues were $491.6 million, up 7.1% year over year. An increase in finance charges and premiums earned supported revenue growth. The top line beat the Zacks Consensus Estimate of $478.8 million.

Full-year GAAP revenues were $1.90 billion, up 3.8% year over year. The top line beat the Zacks Consensus Estimate of $1.89 billion.

Provision for credit losses was $163.7 million in the reported quarter, up 25.6% year over year. Our estimate for the metric was $185.9 million.

Operating expenses of $114.3 million increased 10% year over year. We had projected operating expenses of $126.4 million.

As of Dec 31, 2023, net loans receivables were $6.96 billion, up 10.4% from the December 2022 level. Our estimate for the metric was $6.55 billion.

Total assets were $7.61 billion as of the same date, up from $6.90 billion as of Dec 31, 2022. Total shareholders’ equity was $1.75 billion, up 8%.

In the reported quarter, consumer loan assignment volumes in terms of units and dollar volumes rose 26.7% and 21.3%, respectively, on a year-over-year basis.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.