Q1 2024 Summary
Published Feb 18, 2025, 5:23 PM UTCInitial Price$34.70January 1, 2024
Final Price$39.59April 1, 2024
Price Change$4.89
% Change+14.09%
- Record application flow in auto lending, with Ally hitting records quarter after quarter, leading to increased market share and allowing the company to be selective in underwriting. This strong application flow strengthens Ally's competitive advantage through long-standing dealer relationships.
- Successful loan sales and securitizations, demonstrating strong investor demand for Ally's loans, which generate earnings benefits and free up capital for redeployment. These transactions validate the attractiveness of Ally's loan portfolio and support ongoing profitability.
- Favorable competitive environment persisting, enabling Ally to continue originating high-yielding loans and maintain strong profitability, as competitors face capital and regulatory constraints. This unique opportunity is expected to last longer than usual, further benefiting Ally.
- Ally's 2022 loan vintage is experiencing losses that exceed their price expectations, which could negatively impact earnings as these losses materialize. According to Russell Hutchinson, the 2022 vintage "is where we're seeing losses that exceed our price expectations."
- Ally is focusing on higher-yielding products that carry more credit risk, moving into a "different mix and a different place in the credit spectrum than we would have been in 2019," which may increase future credit risk exposure.
- Upcoming regulatory changes are creating a capital-constrained environment, impacting capital and liquidity, potentially limiting Ally's ability to grow or capitalize on favorable competitive conditions. They mention "we're dealing in a capital-constrained environment with the expectation of regulations coming down the pipeline."