Credit Acceptance (NASDAQ:CACC) vs. Upstart (NASDAQ:UPST) Head-To-Head Review

Upstart (NASDAQ:UPST) and Credit Acceptance (NASDAQ:CACC) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Earnings and Valuation

This table compares Upstart and Credit Acceptance”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upstart	$1.04 billion	2.71	$53.60 million	$0.49	59.35
Credit Acceptance	$2.31 billion	2.70	$423.90 million	$45.48	13.08

Credit Acceptance has higher revenue and earnings than Upstart. Credit Acceptance is trading at a lower price-to-earnings ratio than Upstart, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Upstart and Credit Acceptance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upstart	1	7	8	0	2.44
Credit Acceptance	0	3	1	0	2.25

Upstart presently has a consensus price target of $44.40, indicating a potential upside of 52.68%. Credit Acceptance has a consensus price target of $570.00, indicating a potential downside of 4.18%. Given Upstart’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Upstart is more favorable than Credit Acceptance.

Risk and Volatility

Upstart has a beta of 2.29, indicating that its share price is 129% more volatile than the S&P 500. Comparatively, Credit Acceptance has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Insider & Institutional Ownership

63.0% of Upstart shares are owned by institutional investors. Comparatively, 81.7% of Credit Acceptance shares are owned by institutional investors. 17.3% of Upstart shares are owned by company insiders. Comparatively, 6.1% of Credit Acceptance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Upstart and Credit Acceptance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Upstart	4.84%	7.13%	1.82%
Credit Acceptance	21.54%	31.67%	5.68%

About Upstart

Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform includes personal loans, automotive retail and refinance loans, home equity lines of credit, and small dollar loans that connects consumer demand for loans to its to bank and credit unions. Upstart Holdings, Inc. was founded in 2012 and is headquartered in San Mateo, California.

About Credit Acceptance

Credit Acceptance Corporation engages in the provision of financing programs, and related products and services in the United States. The company advances money to automobile dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps the amount collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. The company serves independent and franchised automobile dealers. Credit Acceptance Corporation was incorporated in 1972 and is headquartered in Southfield, Michigan.