Credit Acceptance Corporation (CACC: NSD) recently disclosed a new risk factor in its latest filings, highlighting the company’s vulnerability to cyberattacks. This disclosure has raised concerns among investors and analysts about the potential impact on the company’s operations, finances, and reputation.
Has Cybersecurity Risk Put a Damper on CACC’s Stock Outlook?
Stock Target Advisor analysis culminates with a ‘Sightly Bullish’ rating. Analysts forecast a target price of $382.33 over the next 12 months for CACC, maintaining an Underperform consensus rating.
Interestingly, some positive signals emerge amidst the gloom. An underpriced cash flow, positive free cash flow, exemplary return on assets, and a high gross profit to asset ratio suggest hidden value underneath.
However, signs of concern are unmistakable as well. Poor capital utilization, an overblown price to book value, and price to earnings ratio indicate overpricing, while high volatility and leverage signal unstable ground.
Analyst’s Take on Credit Acceptance Corporation:
3 market analysts cover CACC, with an average rating tilting towards ‘Sell’. They foresee a target price of $382.33, with a maximum and minimum target price of $440 and $347 respectively.
The sector’s average rating leans towards ‘Underperform’, whereas Stock Target Advisor rates the sector as ‘Slightly Bullish’. The stock returns for the sector stand at -0.92% for the 1-month and 1.03% 1-week.
Conclusion:
The disclosure of this new cybersecurity risk has cast a shadow over Credit Acceptance’s stock. While the company has yet to experience any major cyber incidents, investors and analysts are expressing concerns about the potential consequences. It remains to be seen how Credit Acceptance will address these concerns and mitigate the risks associated with its reliance on secure information technology systems.
