Capital One Financial Corporation operates as the financial services holding company for the Capital One, National Association, which engages in the provision of various financial products and services in the United States, Canada, and the United Kingdom. It operates through three segments: Credit Card, Consumer Banking, and Commercial Banking. The company accepts checking accounts, money market deposits, negotiable order of withdrawals, savings deposits, and time deposits. Its loan products include credit card loans; auto and retail banking loans; and commercial and multifamily real estate, and commercial and industrial loans. The company also offers credit and debit card products; online direct banking services; and provides advisory, capital markets, treasury management, and depository services. It serves consumers, small businesses, and commercial clients through digital channels, branches, cafés, and other distribution channels located in New York, Louisiana, Texas, Maryland, Virginia, New Jersey, and California. The company was founded in 1988 and is headquartered in McLean, Virginia.

Capital One looks fundamentally solid, but the current valuation already reflects a significant portion of the improvements, so only a moderate, cautious adjustment is appropriate for the target price. On valuation multiples, the company trades below the industry median on almost all key metrics: P/E of 12.0, P/B of 1.14, P/S of 1.59, and especially P/FCF of 4.52 all look inexpensive relative to the sector, supporting the idea that the stock is undervalued. At the same time, the trend in valuation multiples is generally not deteriorating, meaning the market is not pricing in a sharp decline in business quality. Profitability is mixed: ROA of 1.52% is above the median, while ROE of 9.01% and ROI of 6.28% are below industry benchmarks, but return on tangible equity of 15.13% already looks stronger and better reflects the bank’s capital quality. Profit margin and operating margin are below the median, but their current levels are noticeably better than in previous quarters, indicating a recovery from a weaker period. Revenue, gross profit, operating profit, and net income in absolute terms look stable, and earnings growth versus recent periods supports the valuation. The company’s balance sheet is large and stable: assets are around $674 billion, equity is $113.8 billion, and long-term debt has declined to $44.7 billion, reducing financial risk. Debt/equity of 0.39 looks moderate and slightly better than the median, which is a positive for a financial company. Liquidity is not ideal: the quick ratio is zero, but for a banking model this is not a critical drawback, while the current ratio of about 1.02 remains stable. The dividend yield of 0.44% has increased, but it is still low, so the dividend factor supports the case but is not the main driver of revaluation. Overall, the picture points to a high-quality, profitable, and relatively inexpensive financial business with improving earnings and capital, but without enough margin for an aggressive increase in the target price. For an investor, this is more a story of moderate upside with a strong fundamental foundation than a reason for a significant upward revision.

Capital One Financial Corporation

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, значительно вырос. Рынок на стороне быков.

Strong index, significantly up. The market is on the bulls' side.

Средний индекс, значительно вырос. Увеличился приток средств в лонги.

Medium index, significantly up. The inflow of funds into longs has increased.

COF looks inexpensive on valuation multiples and is improving profitability, but weak ROE/ROI and a low dividend yield limit re-rating potential.

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Financial Select Sector SPDR Fund (Symbol: XLF) where we have detected an approximate $369.7 million dollar inflow -- that's a 0.7% increase week over week in outstanding units (from 987,145,427 to 993,645,427). Among the largest underlying components of XLF, in trading today Morgan Stanley (Symbol: MS) is down about 2.2%, Blackrock Inc (Symbol: BLK) is up about 1.9%, and Capital One Financial Corp (Symbol: COF) is up by about 0.6%. For a complete list of holdings, visit the XLF Holdings page » The chart below shows the one year price performance of XLF, versus its 200 day moving average:
Looking at the chart above, XLF's low point in its 52 week range is $47.67 per share, with $57.33 as the 52 week high point — that compares with a last trade of $57.31. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further XLF Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy ETF Inflows: XLF, MS, BLK, COF

Key Points
Capital One acquired Discover, materially increasing its position in transaction processing and expanding its card business.
The bank is still integrating the Discover business.
Capital One (NYSE: COF) provided Wall Street with a solid earnings update for the second quarter of 2026. But there was a lot of noise, given the company's ongoing integration of Discover. Here's the good news from the quarter, and a look at the ongoing integration effort that will determine how successful the Capital One-Discover tie-up will be.
Earnings numbers are all over the place
Right now, the acquisition of Discover means Capital One will have very complicated financial results. For example, in the second quarter of 2026, the bank posted net income per share of $4.73, up from $3.34 in the first quarter of 2026 and a loss of $8.58 per share in the year-ago period. The second quarter of 2025 looks terrible in comparison, but don't get too excited about the improvement.
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Second-quarter 2026 adjusted earnings came in at $5.81, up from $5.48 in the second quarter of 2025. That's a solid uptick, but the difference between adjusted and GAAP earnings highlights that there are many moving parts right now. And the Discover acquisition is a big part of the story, as is the subsequent, though much smaller, purchase of Brex. For example, the loss in the second quarter of 2025 was driven by some large Discover acquisition costs. Removing those costs pushed adjusted earnings well into positive territory. In the second quarter of 2026, costs related to Discover and Brex weren't as large, but still totaled $1.08 per share.
These costs aren't going away anytime soon. So, for now, the Discover acquisition means continued earnings complexity. That's a clear negative, but there are positives to consider, too.
The integration is going well
The real story to watch today is the integration of the Discover business, which is still a work in progress. According to the company, things are going well. Capital one debit customers have been transitioned to the Discover network. And Discover's credit card customers are actively being transferred to Capital One's back-end systems. These are big, technically difficult moves that Capital One has to get right, or it could risk losing customers.
That said, Capital One is deliberately overhauling the Discover business to shift it toward a more conservative financing approach. That will likely depress Discover's performance for a bit. So there are many moving parts, but the end of the story is still a net positive for Capital One. For example, revenues increased 4% year over year, and credit quality metrics improved across the board. That's pretty much what investors should be hoping to see. So, if you can look beyond the earnings complexity, the Capital One-Discover tie-up is still moving the company in a good direction.
Should you buy stock in Capital One Financial right now?
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

What the Capital One-Discover Tie-Up Means for the Card Business Now

Enova International, Inc. ENVA reported second-quarter 2026 adjusted earnings per share (EPS) of $4.31, which increased from $3.23 in the prior-year quarter. The metric surpassed the Zacks Consensus Estimate of $3.99.
Results were aided by increased revenues and improving credit quality. However, an increase in expenses was a headwind. Given the concern, shares of the company lost 2.1% in yesterday's trading session despite better-than-expected results.
Results include certain items. After considering those, the company’s net income was $105.1 million compared with $76.1 million in the year-ago quarter.
ENVA’s Revenues & Expenses Rise Y/Y
Total quarterly revenues were $928.9 million, rising 21.6% year over year. The top line surpassed the Zacks Consensus Estimate of $904.46 million.
The total cost of revenue was $2.1 million, which increased 2.3% from the prior-year quarter.
Total operating expenses were $330.9 million, up 28.6% from the previous-year quarter. The rise was due to an increase in marketing, operations and technology and general and administrative expenses. This was partially offset by lower depreciation and amortization expenses. The company also recorded $1.5 million of transaction-related costs tied to the pending Grasshopper Bancorp deal.
Adjusted EBITDA totaled $255.8 million, up 26.3% from the year-ago quarter.
As of June 30, 2026, cash and cash equivalents were $122.2 million compared with $55.6 million as of June 30, 2025. Long-term debt was $5 billion compared with $4 billion as of June 30, 2025.
ENVA’s Segmental Performance
Consumer Loans and Finance Receivables: Net revenues from the segment were $273.5 million, up 28.5% year over year.
Small Business Loans and Finance Receivables: This segment’s net revenues totaled $284.4 million, up 28.6% year over year.
Other: Net revenues of $10.2 million were up 36.7% year over year.
Enova’s Credit Quality: Mixed Bag
The company recorded net charge-offs of $392.1 million compared with $342.9 million in the year-ago quarter.
Net charge-offs/average combined loan and finance receivables were 7.3%, down from 8.1% in the prior-year quarter.
The company’s net revenue margin was 61.2%, up from 57.8% in the prior-year quarter.
The 30-plus-day delinquency ratio was 7.5%, up from 7.1% in the year-ago quarter.
ENVA’s Share Repurchase Update
In the second quarter, the company repurchased $19 million of common stock.
Our View on ENVA
The company’s revenue growth and improving net charge-off ratio are expected to support near-term performance. Also, growth in consumer and small-business lending is likely to aid results. The planned acquisition of Grasshopper Bancorp is expected to close in the second half of 2026, subject to regulatory approvals from the OCC and the Federal Reserve. The transaction is likely to provide revenue and funding synergies and enhance balance-sheet flexibility. However, rising expenses and increased debt remain concerns.
Enova International, Inc. Price, Consensus and EPS Surprise
Currently, ENVA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Enova’s Peers
Capital One Financial’s COF second-quarter 2026 adjusted earnings of $5.81 per share significantly outpaced the Zacks Consensus Estimate of $4.85. The bottom line was up from $5.48 in the prior-year quarter.
Results benefited from a rise in net interest income and non-interest income, along with a substantial decline in provisions. Loan growth and improvement in net interest margin were other positives. However, higher expenses and a sequential decline in deposits were undermining factors for COF.
Ally Financial’s ALLY second-quarter 2026 adjusted earnings of $1.21 per share lagged the Zacks Consensus Estimate of $1.25. However, the bottom line reflected a 22% jump from the year-ago quarter.
ALLY’s results were primarily hampered by higher expenses and provisions. However, growth in net financing revenues and other revenues, an increase in loan balances and an improvement in NIM offered support to some extent.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Enova Q2 Earnings Beat on Higher Revenues, Stock Dips as Costs Rise Y/Y

(RTTNews) - Capital One Financial Corporation (COF) on Tuesday, reported second-quarter 2026 results, with profit rebounding from the year-ago quarter as revenue increased and credit loss provisions declined.
Total net revenue rose to $15.85 billion in the second quarter of 2026 from $12.49 billion a year earlier. Net profit increased to $3.02 billion, or $4.73 per share, compared with a net loss of $4.28 billion, or $8.58 per share, in the prior-year quarter.
Net interest income increased to $12.37 billion from $10.00 billion, while non-interest income rose to $3.48 billion from $2.50 billion. Provision for credit losses declined to $2.99 billion from $11.43 billion, while total non-interest expense increased to $9.04 billion from $6.99 billion.
COF closed trading is currently trading after hours at $206.69 up $0.47 or 0.23 percent on the New York Stock Exchange.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Capital One Returns To Profit In Q2

Capital One (COF) came out with quarterly earnings of $5.81 per share, beating the Zacks Consensus Estimate of $4.85 per share. This compares to earnings of $5.48 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +19.79%. A quarter ago, it was expected that this credit card issuer and bank would post earnings of $4.61 per share when it actually produced earnings of $4.42, delivering a surprise of -4.12%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Capital One, which belongs to the Zacks Financial - Consumer Loans industry, posted revenues of $15.85 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.96%. This compares to year-ago revenues of $12.49 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Capital One shares have lost about 14.7% since the beginning of the year versus the S&P 500's gain of 8.7%.
What's Next for Capital One?
While Capital One has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Capital One was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $5.50 on $16.05 billion in revenues for the coming quarter and $19.54 on $63.43 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Consumer Loans is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Enova International (ENVA), is yet to report results for the quarter ended June 2026. The results are expected to be released on July 23.
This online financial services company is expected to post quarterly earnings of $3.99 per share in its upcoming report, which represents a year-over-year change of +23.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Enova International's revenues are expected to be $904.46 million, up 18.4% from the year-ago quarter.
Should You Invest in Capital One Financial Corporation (COF)?
Before you invest in Capital One Financial Corporation (COF), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy.
Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Capital One (COF) Tops Q2 Earnings and Revenue Estimates

(RTTNews) - Capital One Financial Corp. (COF) will host a conference call at 5:00 PM ET on July 21, 2026, to discuss Q2 26 earnings results.
To access the live webcast, log on to https://edge.media-server.com/mmc/p/niu7uiid/
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Capital One Financial Q2 26 Earnings Conference Call At 5:00 PM ET

The following companies are expected to report earnings after hours on 07/21/2026. Visit our Earnings Calendar for a full list of expected earnings releases.
Chubb Limited (CB)is reporting for the quarter ending June 30, 2026. The insurance (property & casualty) company's consensus earnings per share forecast from the 10 analysts that follow the stock is $6.63. This value represents a 7.98% increase compared to the same quarter last year. In the past year CB has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 5.25%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for CB is 13.17 vs. an industry ratio of 9.60, implying that they will have a higher earnings growth than their competitors in the same industry.
Capital One Financial Corporation (COF)is reporting for the quarter ending June 30, 2026. The financial services company's consensus earnings per share forecast from the 7 analysts that follow the stock is $4.85. This value represents a 11.50% decrease compared to the same quarter last year. The last two quarters COF had negative earnings surprises; the latest report they missed by -4.12%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for COF is 10.58 vs. an industry ratio of 13.80.
Interactive Brokers Group, Inc. (IBKR)is reporting for the quarter ending June 30, 2026. The investment bankers company's consensus earnings per share forecast from the 2 analysts that follow the stock is $0.63. This value represents a 23.53% increase compared to the same quarter last year. IBKR missed the consensus earnings per share in the 1st calendar quarter of 2026 by -3.23%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for IBKR is 35.95 vs. an industry ratio of 17.00, implying that they will have a higher earnings growth than their competitors in the same industry.
EQT Corporation (EQT)is reporting for the quarter ending June 30, 2026. The oil (us exp & production) company's consensus earnings per share forecast from the 6 analysts that follow the stock is $0.41. This value represents a 8.89% decrease compared to the same quarter last year. In the past year EQT has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 4.48%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for EQT is 11.54 vs. an industry ratio of 3.70, implying that they will have a higher earnings growth than their competitors in the same industry.
East West Bancorp, Inc. (EWBC)is reporting for the quarter ending June 30, 2026. The bank (west) company's consensus earnings per share forecast from the 7 analysts that follow the stock is $2.61. This value represents a 14.47% increase compared to the same quarter last year. In the past year EWBC has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 4.47%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for EWBC is 12.68 vs. an industry ratio of 13.90.
Annaly Capital Management Inc. (NLY)is reporting for the quarter ending June 30, 2026. The reit company's consensus earnings per share forecast from the 4 analysts that follow the stock is $0.75. This value represents a 2.74% increase compared to the same quarter last year. In the past year NLY has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 2.7%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for NLY is 7.52 vs. an industry ratio of 11.80.
Webster Financial Corporation (WBS)is reporting for the quarter ending June 30, 2026. The bank (northeast) company's consensus earnings per share forecast from the 6 analysts that follow the stock is $1.61. This value represents a 5.92% increase compared to the same quarter last year. In the past year WBS has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 2.61%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for WBS is 11.47 vs. an industry ratio of 11.40, implying that they will have a higher earnings growth than their competitors in the same industry.
Western Alliance Bancorporation (WAL)is reporting for the quarter ending June 30, 2026. The bank (west) company's consensus earnings per share forecast from the 6 analysts that follow the stock is $2.33. This value represents a 12.56% increase compared to the same quarter last year. In the past year WAL has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 50%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for WAL is 8.52 vs. an industry ratio of 13.90.
Range Resources Corporation (RRC)is reporting for the quarter ending June 30, 2026. The oil (us exp & production) company's consensus earnings per share forecast from the 6 analysts that follow the stock is $0.52. This value represents a 14.75% decrease compared to the same quarter last year. In the past year RRC has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 14.73%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for RRC is 10.60 vs. an industry ratio of 3.70, implying that they will have a higher earnings growth than their competitors in the same industry.
Hancock Whitney Corporation (HWC)is reporting for the quarter ending June 30, 2026. The banks (southeast) company's consensus earnings per share forecast from the 5 analysts that follow the stock is $1.55. This value represents a 13.14% increase compared to the same quarter last year. In the past year HWC has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 2.7%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for HWC is 11.95 vs. an industry ratio of 12.70.
Weatherford International plc (WFRD)is reporting for the quarter ending June 30, 2026. The oil (field services) company's consensus earnings per share forecast from the 4 analysts that follow the stock is $0.92. This value represents a 50.80% decrease compared to the same quarter last year. WFRD missed the consensus earnings per share in the 3rd calendar quarter of 2025 by -2.61%. Zacks Investment Research reports that the 2026 Price to Earnings ratio for WFRD is 13.16 vs. an industry ratio of -6.00, implying that they will have a higher earnings growth than their competitors in the same industry.
Bank OZK (OZK)is reporting for the quarter ending June 30, 2026. The bank (northeast) company's consensus earnings per share forecast from the 5 analysts that follow the stock is $1.46. This value represents a 7.59% decrease compared to the same quarter last year. The "days to cover" for this stock exceeds 11 days. Zacks Investment Research reports that the 2026 Price to Earnings ratio for OZK is 8.54 vs. an industry ratio of 11.40.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

After-Hours Earnings Report for July 21, 2026 : CB, COF, IBKR, EQT, EWBC, NLY, WBS, WAL, RRC, HWC, WFRD, OZK

Key Points
Capital One bought Discover, opening up a material business expansion for the bank.
Bringing the two companies together is going to require a huge effort, and it really needs to go smoothly.
Capital One (NYSE: COF) is best known for issuing credit cards. However, it demonstrated that it had wider aspirations when it bought Discover, a payment processing company. Although the merger is complete, the integration process is still a work in progress. July 27 will be a big date to watch, since that's when some Discover products will start being integrated into Capital One's back end.
Finance is hard, technically speaking
The finance industry is highly regulated. The technology that supports financial businesses is complex, and each company typically has a proprietary system. Mistakes that affect customers are frowned upon by both customers and regulators. This is why July 27 is so important for Capital One shareholders to watch.
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While Discover cards will still exist in name, that is when they will start being supported by the Capital One back end. Strong execution will be vital, and it is highly likely that Capital One's tech team is under significant pressure to ensure a smooth cutover. If the transition process goes poorly, Capital One risks losing Discover customers.
However, there's another problem to consider, even if the cut over is flawless. If Discover cardholders don't like the Capital One back end, they might leave. So this isn't just a technical issue; it's also a product issue for the bank. To be fair, Capital One isn't making massive changes to Discover products, but it is making some changes, and more are likely in the future. One possible headache for cardholders is that new cards will be issued for authorized users, with the cards going to the primary account holder. This is being done to protect customers, but it means the primary account holder has to distribute the new cards. Capital One shareholders should probably pay extra attention over the next couple of quarters.
Capital One has a big opportunity
This is the first real test of Capital One's acquisition of Discover. If it goes well, there could be a very bright future ahead. Not only will Capital One have successfully entered the transaction processing business, but it will have added millions of new credit card relationships. If Capital One can retain those relationships, it opens up additional cross-selling opportunities for the bank and card issuer.
As noted, the problem is that the computer systems that support financial businesses are highly complex. So don't underestimate the difficulty and importance of the July 27 transition. Hopefully, Discover customers won't see much of an impact, but if they do, this merger could be far less beneficial than hoped.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Capital One Flips Millions of Discover Cards to Its Own Platform on July 27. Can It Upsell Without Losing Them?

Key Points
The subprime auto loan delinquency rate hit 6.8% at the start of 2026.
The 60-day delinquency rate remains elevated, higher than during the Great Recession.
Making loans to higher-credit-quality customers remains a good business, with delinquencies near historically low levels.
Making a loan is a big decision for a lender. The lender must assess the likelihood of repayment in a timely fashion. The higher the loan's risk, however, the higher the interest rate the lender can charge. So there are trade-offs that have to be made. The auto loan space has a history of companies taking on too much risk. That is a problem for investors today, as subprime auto loan delinquency rates are high.
Be careful how much risk you take on
When you buy a stock, you become a part-owner of the business. This is why it is so important to understand the companies you invest in. If you don't fully understand what the business is doing, you can't properly assess the risks and potential rewards of the investment. This is particularly important for companies that make auto loans.
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Subprime auto lenders can make huge profits when times are good because of the shockingly high rates they can charge customers. But during a recession, their customers often stop paying. And that can cause deep financial strain for subprime auto lenders. Often, a recession isn't even necessary; it can just be an economic soft patch.
For example, subprime auto lenders American Car Center and U.S. Auto Sales both ran into trouble in 2023. In 2025, Tricolor Holdings hit the skids, though it was accused of fraud, so other factors were at play. And in mid-2026, America's Car-Mart (NASDAQ: CRMT) was forced to work with its lenders to help it survive. The 60-day delinquency rate, which rose to a historical high at the start of 2026, is not a good sign for this niche of the auto-lending industry.
The subprime auto loan delinquency rate began 2026 at around 6.8%. The 60-day delinquency rate remains above levels seen during the Great Recession. Investors need to pay close attention to lenders such as OneMain Holdings (NYSE: OMF) and Credit Acceptance (NASDAQ: CACC).
What's the situation with high-risk loans?
OneMain Holdings 30-day delinquency rate was 5.37% in the first quarter, down from 5.85% in the December quarter, but up from the prior year's 5.16%. Charge-offs rose from 7.83% to 8.02% year over year. The company isn't exactly falling off a cliff, but the credit situation appears to be weakening. Credit Acceptance's first quarter 2026 update showed that loans made between 2021 and 2024 have been underperforming expectations. Even 2026 loans haven't been performing as well as hoped.
This is where investors should step back and consider a pivot. Bank and credit card processor Capital One Financial (NYSE: COF), for example, works with lower-credit-quality customers, but it is more stringent about who it lends to. It issues credit cards and makes auto loans, with a combined 30-day delinquency rate of 3.24%. That was down from the December quarter's 3.59% and from the same quarter of 2025, when the rate was 3.51%. To be fair, Capital One's 30-day delinquency rate on autoloans is higher, at 4.21%, but that's down from 5.23% in the fourth quarter of 2025 and 4.93% in the year-ago period. In other words, Capital One's business is holding up much better, likely thanks to its more discerning lending approach.
It is time to be prudent
Most investors should probably avoid businesses that make car loans to financially troubled customers. That's true most of the time, but particularly true right now, with delinquency rates rising. However, if you are interested in the sector, likely thanks to the higher interest rates that can be charged to customers, you should probably err on the side of caution. Capital One is a way to get exposure to lower-quality customers without betting the bank on the highest-risk niche of the auto lending space. Notably, the delinquency rate for higher-quality auto loans is historically low.
Should you buy stock in Capital One Financial right now?
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Capital One Financial. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Subprime Auto Loans Just Hit Their Worst Delinquency Rate in 32 Years. Here's What It Means for Lenders.

Investors in Capital One Financial Corp (Symbol: COF) saw new options become available today, for the August 28th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the COF options chain for the new August 28th contracts and identified one put and one call contract of particular interest.
The put contract at the $195.00 strike price has a current bid of $7.80. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $195.00, but will also collect the premium, putting the cost basis of the shares at $187.20 (before broker commissions). To an investor already interested in purchasing shares of COF, that could represent an attractive alternative to paying $196.92/share today.
Because the $195.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 55%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 4.00% return on the cash commitment, or 29.20% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Capital One Financial Corp, and highlighting in green where the $195.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $200.00 strike price has a current bid of $7.00. If an investor was to purchase shares of COF stock at the current price level of $196.92/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $200.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.12% if the stock gets called away at the August 28th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if COF shares really soar, which is why looking at the trailing twelve month trading history for Capital One Financial Corp, as well as studying the business fundamentals becomes important. Below is a chart showing COF's trailing twelve month trading history, with the $200.00 strike highlighted in red:
Considering the fact that the $200.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 52%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.55% boost of extra return to the investor, or 25.95% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 37%, while the implied volatility in the call contract example is 36%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $196.92) to be 32%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Further COF Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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