MeritValue

CREDIT ACCEPTANCE CORP

CACCdata completeness 88%17 fiscal years on file
The thesis, from the filings

CREDIT ACCEPTANCE CORP earns about 44% on invested capital, far above its ~9% cost of capital, and has bought back 28% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $377.03 and $1,541.34 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.86B1$1.83B2$1.9B3$2.16B3$2.32B3
Net income$958.3M4$535.8M5$286.1M6$247.9M6$423.9M6
Operating cash flow$1.07B7$1.24B8$1.2B9$1.14B9$1.05B9
Capital expenditure$7.6M10$3.1M11$4M12$1.8M12$1.6M12
Free cash flow (derived)$1.06B7$1.24B8$1.2B9$1.14B9$1.05B9
Total debt—————
Cash & equivalents$23.3M13$7.7M14$13.2M15$343.7M15$22.8M15
Diluted shares16.1M13.6M13.0M12.5M11.7M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$1,307.72
your share of equity
Profit it earned you last year
$363.84
Free cash flow it threw off
$903.8
Debt you’d be carrying
—

10 shares is a claim on $1,307.72 of net worth that earned you $363.84 and generated $903.8 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
44% avg · 5y
FY21 60%FY22 41%FY23 28%FY24 40%FY25 51%

It earned about 44% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−28% shares · 5y

Share count is down 28% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $377.03 and $1,541.34 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$1,530.57
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth2.3%
  • fcfBase$1.14B
DCF · Growth Exit 5Y
$1,541.34
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth2.3%
  • fcfBase$1.14B
Earnings Power Value
$377.03
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$423.9M
  • growthAssumed0.0%
Graham Number
$327.18
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years2.3%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $1,541.34
The three cases
Bear0.0%$1,395.2
Base2.3%$1,541.34
Bull7.3%$1,907.66

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 2.3%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000885550-24-000030 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000885550-25-000012 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0000885550-26-000047 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000885550-24-000030 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000885550-25-000012 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000885550-26-000047 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000885550-24-000030 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000885550-25-000012 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000885550-26-000047 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000885550-24-000030 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000885550-25-000012 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000885550-26-000047 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000885550-24-000030 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0000885550-25-000012 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0000885550-26-000047 (CashAndCashEquivalentsAtCarryingValue)