Is Credit Acceptance Corp. overvalued or undervalued?

As of 21 April 2025, the valuation grade for Credit Acceptance Corp. has moved from very expensive to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued. Key ratios include a P/E ratio of 20, a Price to Book Value of 3.43, and an EV to EBITDA of 2.84, which suggest that the stock is trading at a premium compared to its earnings and book value.
In comparison to peers, Credit Acceptance Corp.'s P/E ratio of 19.95 is significantly higher than AerCap Holdings NV's fair valuation P/E of 10.43 and Blue Owl Capital Corp.'s very attractive P/E of 11.29. The company's recent stock performance has shown a 6.58% year-to-date return, which, while positive, pales in comparison to the S&P 500's 2.44% return in the same period, reinforcing the notion that the stock may not be a compelling investment at its current price.