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ACV Auctions (ACVA)
NASDAQ:ACVA
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ACV Auctions
(NASDAQ:ACVA)
56Neutral
Positive Factors
Innovation and Technology
New innovations such as Virtual Lift 2.0 and Project Viper are expected to help ACVA expand its data moat and attract new dealers to the platform.
Market Expansion
ACV now covers the entire U.S. in terms of its auction capabilities, driving consistent regional penetration through its land and expand strategy.
Revenue Growth
ACV is expected to sustain 20% revenue growth for over three years, indicating strong business performance.
Negative Factors
Competition
Potential macro shocks and competition from incumbent providers pose risks to ACV's performance.
Supply Chain Challenges
Demand for ACV has remained strong, with supply headwinds expected to ease in the future, supporting a positive outlook for the company.
ACV Auctions (ACVA) vs. S&P 500 (SPY)
Market Cap
$2.58B
Dividend YieldN/A
Average Volume (3M)2.87M
Price to Earnings (P/E)―
Beta (1Y)1.81
Revenue Growth32.40%
EPS Growth-2.74%
CountryUS
Employees2,900
SectorConsumer Cyclical
Sector Strength48
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)-0.48
Shares Outstanding168,765,170
10 Day Avg. Volume3,915,688
30 Day Avg. Volume2,871,279
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.06
Price to Cash Flow (P/CF)-200.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.89Price Target Upside42.97% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
ACV Auctions Business Overview & Revenue Model
Company DescriptionACV Auctions Inc. (ACVA) is a leading provider of digital wholesale automotive marketplaces. The company operates primarily in the automotive sector, offering dealers a comprehensive platform through which they can buy and sell used vehicles via online auctions. ACV Auctions leverages technology to provide real-time data, pricing analytics, and vehicle inspection services, facilitating more efficient and transparent transactions for its clients.
How the Company Makes MoneyACV Auctions generates revenue primarily through transaction fees charged on vehicles sold through its platform. The company earns fees from both the seller and buyer for each successful auction transaction. Additionally, ACV Auctions offers ancillary services such as vehicle inspection and data analytics, which also contribute to its revenue streams. Strategic partnerships with financial institutions and automotive dealerships further enhance its business operations and expand its market reach, providing additional revenue opportunities through integrated solutions and value-added services.
ACV Auctions Financial Statement Overview
Summary
ACV Auctions exhibits strong revenue growth and robust cash flow generation, with significant improvements in free cash flow. However, challenges remain in achieving profitability, as evidenced by negative EBIT and net profit margins, despite a strong balance sheet with low leverage.Income Statement
ACV Auctions has demonstrated a strong revenue growth trajectory, with a notable increase of 32.41% from 2023 to 2024. The gross profit margin for 2024 is significant at 61.05%, indicating effective cost management. However, the company continues to report a negative EBIT margin of -13.20% and a net profit margin of -12.51%, reflecting ongoing challenges in achieving profitability.72
Positive
Balance Sheet
The balance sheet shows a strong equity position with an equity ratio of 44.71%, pointing to a solid financial foundation. The debt-to-equity ratio is manageable at 0.28, indicating low leverage risk. However, the negative net income results in a negative ROE, highlighting the need for improved profitability to enhance shareholder returns.65
Positive
Cash Flow
ACV Auctions' cash flow position has improved significantly, with a positive operating cash flow of $65.4 million and a free cash flow of $60.9 million in 2024. The free cash flow to net income ratio is robust, indicating strong cash generation relative to net losses. The company has also shown a remarkable turnaround in free cash flow growth, moving from negative to positive territory year-over-year.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 637.16M | 481.23M | 421.53M | 358.44M | 208.36M | Gross Profit |
| 388.95M | 236.78M | 184.88M | 153.68M | 95.31M | EBIT |
| -84.11M | -89.68M | -106.21M | -76.81M | -40.65M | EBITDA |
| -46.57M | -53.88M | -89.75M | -67.92M | -32.65M | Net Income Common Stockholders |
| -79.70M | -75.26M | -102.19M | -78.18M | -41.02M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 270.10M | 411.33M | 496.68M | 579.76M | 233.72M | Total Assets |
| 984.15M | 922.92M | 914.92M | 982.96M | 404.55M | Total Debt |
| 123.00M | 115.00M | 76.67M | 3.85M | 6.90M | Net Debt |
| -101.06M | -66.87M | -204.08M | -562.14M | -226.82M | Total Liabilities |
| 544.14M | 466.40M | 429.20M | 426.86M | 544.24M | Stockholders Equity |
| 440.00M | 456.53M | 485.72M | 556.10M | -139.69M |
| Cash Flow | Free Cash Flow | |||
| 60.86M | -46.05M | -97.66M | 71.26M | 1.48M | Operating Cash Flow |
| 65.40M | -17.89M | -74.26M | 85.29M | 10.37M | Investing Cash Flow |
| -15.86M | -110.97M | -283.89M | -129.27M | -19.67M | Financing Cash Flow |
| -7.87M | 30.63M | 72.93M | 376.25M | 60.76M |
ACV Auctions Technical Analysis
Negative
16.01
Price Trends
18.44
Negative
19.68
Negative
19.05
Negative
Market Momentum
-0.79
Negative
51.43
Neutral
93.36
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACVA, the sentiment is Negative. The current price of 16.01 is above the 20-day moving average (MA) of 14.92, below the 50-day MA of 18.44, and below the 200-day MA of 19.05, indicating a neutral trend. The MACD of -0.79 indicates Negative momentum. The RSI at 51.43 is Neutral, neither overbought nor oversold. The STOCH value of 93.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACVA.
ACV Auctions Risk Analysis
ACV Auctions disclosed 53 risk factors in its most recent earnings report. ACV Auctions reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ACV Auctions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $26.27B | 51.58 | 7.71% | 1.15% | 18.26% | 141.71% | |
70 Outperform | $45.54B | 135.87 | 27.94% | ― | 26.94% | -57.88% | |
66 Neutral | $2.20B | 46.20 | 4.80% | ― | 6.47% | ― | |
59 Neutral | $12.50B | 11.24 | 1.20% | 3.72% | 1.27% | -20.93% | |
57 Neutral | $3.28B | 173.67 | 3.62% | ― | -2.17% | -26.53% | |
56 Neutral | $2.58B | ― | -17.78% | ― | 32.40% | -2.74% | |
51 Neutral | $155.32M | ― | -22.31% | ― | 10.64% | 38.48% |
* Consumer Cyclical Sector Average
Performance Comparison
ACVA
ACV Auctions
16.36
-2.19
-11.81%
KAR
Kar Auction Services
21.12
4.16
24.53%
TRUE
TrueCar
1.88
-1.40
-42.68%
CVNA
Carvana Co
221.66
130.85
144.09%
CARG
CarGurus
31.75
8.57
36.97%
TSE:RBA
RB Global
143.34
41.85
41.24%
ACV Auctions Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -22.47% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in revenue growth, adjusted EBITDA profitability, and market share gains, supported by AI-driven innovations and a solid financial outlook. However, challenges in the used-vehicle market and flat wholesale volumes due to consumer affordability issues and inventory shortages were notable low points.Highlights
Record Revenue Growth
Q4 revenue of $160 million exceeded guidance, leading to a full year revenue growth of 32% in 2024.
Adjusted EBITDA Profitability
Achieved first full year of adjusted EBITDA profitability with a 900 basis point year-over-year improvement.
Market Share Gains
Continued to gain market share with over half of US dealers transacting on ACV's marketplace.
Strong Performance in ACV Transport
ACV Transport achieved over 30% revenue growth with 410,000 deliveries in 2024, and revenue margin expanded by 300 basis points.
AI-Driven Innovations
Released new AI-powered features that predict vehicle prices with high accuracy, enhancing pricing intelligence and marketplace conversion.
Strong Financial Outlook
2025 guidance includes revenue growth of 20% to 23% and adjusted EBITDA growth of approximately 150% year-over-year.
Lowlights
Flat Dealer Wholesale Volumes
2024 experienced flat dealer wholesale volumes due to consumer affordability issues and used-vehicle inventory being 25% below normal.
Market Uncertainties
The used-vehicle market continues to face challenges with no sustained improvement in the trade to wholesale mix.
Mixed Automotive Market Conditions
Despite a 2% increase in new vehicle sales, the used-vehicle market experienced modest declines, with uncertainties around retail sales recovery.
Company Guidance
During the ACV Fourth Quarter 2024 Earnings Conference Call, guidance for 2025 included an expectation of flat dealer wholesale volumes year-over-year, despite pockets of improvement in the broader automotive market. The company anticipates revenue growth of 20% to 23%, reaching between $765 million and $785 million, and aims for adjusted EBITDA between $65 million and $75 million, reflecting approximately 150% growth year-over-year. The guidance assumes conversion rates and wholesale price depreciation will follow normal seasonal patterns. ACV also plans to continue investing in long-term growth objectives, such as leveraging AI for pricing intelligence and introducing new value-added services, while maintaining strong top-line growth and adjusted EBITDA expansion.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.