Veteran financial analyst Josh Steiner addressed unsettling news from Credit Acceptance Corp (CACC) and what it means for the overall lending environment this morning on The Call @ Hedgeye with CEO Keith McCullough.
The auto loan company reported a significant 3Q earnings miss, with a 16% year-over-year drop.
“They did talk about the competitive environment getting better for them. What I think that’s a euphemism for is that many other lenders are pulling out of the space, leaving just them,” Steiner explains. “I guess it is getting better in that respect, but if everyone’s getting out of the business, that’s probably not a great sign.”
“Things are going to deteriorate on the labor front,” Steiner explained. “We wouldn’t be surprised to see ongoing weakness in used car pricing as well.”
"It's bad,” McCullough adds. “It's really bad and slowing in rate of change terms because bad is bad, but slowing is worse."
For the full discussion, click above.