Credit Acceptance Corporation

AI-generated fair value estimate for this company.

Method: Justified price-to-book (residual income) model: $148.9 book value per share (average Q2 2026 shareholders equity divided by shares); normalized 20% return on equity (below the cyclically elevated 31.9% TTM figure); 13% cost of equity (reflecting subprime-credit and regulatory risk); 3% long-run growth; justified P/B = 1.70x.

Reasoning: Credit Acceptance is a subprime auto lender whose GAAP ROE is currently running well above a sustainable through-cycle level and which carries material recurring CFPB/state-AG regulatory risk, so a residual-income approach with a normalized (not peak) ROE and an elevated cost of equity is used rather than treating the current ROE as permanent.