CACC
Credit Acceptance Corporation
$640.00
Platform & Compounding FCF
70%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 32.3% below fair value
You pay
$640.00
Bear
$636.84
Fair
$945.79
Bull
$1,236.19
Bear
$636.84
-0.5%
5% stage 1 growth, 12% discount
Fair
$945.79
+47.8%
8% stage 1 growth, 12% discount
Bull
$1,236.19
+93.2%
11% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
33%
Implied Market Multiple
12.4x
Market is pricing in (growth)
4.1%
vs 8.5% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $540.00 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $945.79 per share.
Warnings
Wall Street's average price target is $540.00 (from 18 analysts). Our estimate is 100% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions