Yahoo Finance Strength Seen in Credit Acceptance (CACC): Can Its 8.8% Jump Turn into More Strength?
Credit Acceptance (CACC) shares soared 8.8% in the last trading session to close at $441.72. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 12.7% loss over the past four weeks.
Credit Acceptance witnessed a rise in share price for the second consecutive day. The performance of consumer loan providers is expected to be solid in the near-term on higher interest rates despite recessionary fears. The Federal Reserve is expected to hike the interest rates by another 50 basis points in the first quarter of 2023 (having already increased the rates by 450 basis points in 2022) to bring down the “sticky” inflation. This, thus, led to bullish investor sentiments, which drove CACC stock higher.
This auto financing company is expected to post quarterly earnings of $7.71 per share in its upcoming report, which represents a year-over-year change of -47.2%. Revenues are expected to be $436.42 million, down 5.8% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Credit Acceptance, the consensus EPS estimate for the quarter has been revised 5.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. 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 belongs to the Zacks Financial - Consumer Loans industry. Another stock from the same industry, OneMain Holdings (OMF), closed the last trading session 2.4% higher at $41.47. Over the past month, OMF has returned 21.8%.
OneMain's consensus EPS estimate for the upcoming report has changed +6.4% over the past month to $1.50. Compared to the company's year-ago EPS, this represents a change of -37%. OneMain currently boasts a Zacks Rank of #3 (Hold).
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