ACV Auctions (ACVA) AI Stock Analysis

• Market Cap: $1.99B
• Dividend Yield: N/A
• Average Volume (3M): 2.51M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.44
• Revenue Growth: 30.08%
• EPS Growth: 21.11%
• Country: US
• Employees: 2,900
• Sector: Consumer Cyclical
• Sector Strength: 81
• Industry: Auto - Dealerships
• EPS (TTM): 0.07
• Shares Outstanding: 172,107,120
• 10 Day Avg. Volume: 3,406,855
• 30 Day Avg. Volume: 2,514,172
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 3.74
• Enterprise Value/Gross Profit: 6.55
• Enterprise Value/Ebitda: -154.09
• 1Y Price Target: $19.05
• Price Target Upside: 64.37% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 54 Neutral
• Price Target: $12.00 ▲(3.54% Upside)

ACV Auctions' strong revenue growth and cash flow management are overshadowed by ongoing profitability challenges and weak technical indicators. The earnings call provided positive long-term prospects, but macroeconomic uncertainties and valuation concerns weigh on the overall score. The recent credit facility expansion offers some strategic advantages.

Positive Factors

Market Share

ACV Auctions is projected to experience strong revenue and unit growth, slightly above market expectations.

Marketplace Services

Growth in marketplace services helped offset some topline pressures.

Revenue Growth

Revenue increased 25% year over year, with adjusted EBITDA exceeding the high-end of guidance due to continued operating expense discipline.

Negative Factors

Acquisition Impact

Comparisons in the third quarter are expected to be tougher due to acquisitions last year impacting unit and sales growth.

Revenue Guidance

Despite management lowering the top-end of FY’25 revenue guidance, ACVA is expected to take significant share from the wholesale dealer market.

Supply Constraints

Dealers are likely facing supply constraints, which could slow down growth reflected in retail data.

ACV Auctions Business Overview & Revenue Model

Company Description

ACV Auctions Inc. operates a digital marketplace that connects buyers and sellers for the online auction of wholesale vehicles. It also provides data services that offer insights into the condition and value of used vehicles, as well as offers customer financing services. ACV Auctions Inc. was incorporated in 2014 and is headquartered in Buffalo, New York.

How the Company Makes Money

ACV Auctions makes money primarily through transaction fees collected from the vehicles sold on its platform. The company charges sellers a fee based on the final sale price of each vehicle transacted through its online auctions. Additionally, ACV Auctions generates revenue through various ancillary services, such as vehicle transportation and financing solutions, which are offered to further facilitate the buying and selling process for dealers. Key partnerships with auto dealerships and financial institutions also play a significant role in enhancing the company's service offerings and expanding its market reach.

ACV Auctions Financial Statement Overview

Summary

ACV Auctions shows strong revenue growth and cash flow management, but struggles with profitability and shareholder returns. The balance sheet is stable with moderate leverage, yet negative margins and return on equity are concerns.

Income Statement

ACV Auctions shows a positive revenue growth trend with a 4.91% increase in TTM, indicating a growing market presence. However, the company struggles with profitability, as evidenced by negative net profit and EBIT margins. The gross profit margin remains strong at 59.57%, suggesting efficient cost management. Despite growth, the persistent negative margins highlight challenges in achieving profitability.

Balance Sheet

The balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.42, indicating manageable debt levels. The equity ratio stands at 39.43%, showing a solid equity base. However, the negative return on equity (-14.41%) points to inefficiencies in generating returns for shareholders, which is a concern for long-term sustainability.

Cash Flow

The cash flow statement reveals a robust free cash flow growth of 31.96% in TTM, highlighting improved cash generation capabilities. The operating cash flow to net income ratio of 0.21 indicates a positive cash conversion cycle. The free cash flow to net income ratio exceeds 1, suggesting effective cash management despite net losses. Overall, cash flow performance is a strong point for the company.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	707.24M	637.16M	481.23M	421.53M	358.44M	208.36M
Gross Profit	404.37M	388.95M	236.78M	184.88M	153.68M	95.31M
EBITDA	-17.18M	-46.57M	-53.88M	-89.75M	-67.92M	-32.65M
Net Income	-64.28M	-79.70M	-75.26M	-102.19M	-78.18M	-41.02M
Balance Sheet
Total Assets	1.14B	984.15M	922.92M	914.92M	982.96M	404.55M
Cash, Cash Equivalents and Short-Term Investments	304.73M	270.10M	411.33M	496.68M	579.76M	233.72M
Total Debt	186.50M	123.00M	131.68M	76.67M	3.85M	6.90M
Total Liabilities	689.49M	544.14M	466.40M	429.20M	426.86M	544.24M
Stockholders Equity	448.78M	440.00M	456.53M	485.72M	556.10M	-139.69M
Cash Flow
Free Cash Flow	99.96M	60.86M	-46.05M	-97.66M	71.26M	1.48M
Operating Cash Flow	98.25M	65.40M	-17.89M	-74.26M	85.29M	10.37M
Investing Cash Flow	-105.51M	-15.86M	-110.97M	-283.89M	-129.27M	-19.67M
Financing Cash Flow	50.55M	-7.87M	30.63M	72.93M	376.25M	60.76M

ACV Auctions Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 11.59 is below the 20-day moving average (MA) of 12.60, below the 50-day MA of 14.44, and below the 200-day MA of 17.25, indicating a bearish trend. The MACD of -0.90 indicates Negative momentum. The RSI at 34.34 is Neutral, neither overbought nor oversold. The STOCH value of 60.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACVA.

ACV Auctions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABG	75 Outperform	$4.97B	9.23	15.19%	―	8.39%	40.35%
KAR	72 Outperform	$3.09B	39.18	6.27%	―	11.45%	741.65%
CARS	71 Outperform	$794.49M	21.05	8.37%	―	0.68%	67.41%
Sector *	61 Neutral	$17.75B	12.51	-5.49%	3.06%	1.43%	-14.10%
CANG	57 Neutral	$519.98M	6.63	0.12%	―	40.31%	-204.86%
ACVA	54 Neutral	$1.99B	―	-14.18%	―	30.08%	21.11%
UXIN	44 Neutral	$859.73M	―	260.24%	―	―	―

ACV Auctions Corporate Events

ACV Auctions Expands Credit Facility to $250 Million

On June 26, 2025, ACV Auctions Inc. amended its Revolving Credit Agreement, increasing its revolving credit facility from $160 million to $250 million and extending the maturity date to June 26, 2030. This amendment introduces a new maximum Total Net Leverage Ratio covenant effective by June 30, 2027, and offers more favorable loan pricing post-Covenant Conversion Date, impacting the company’s financial strategy and potentially enhancing its market position.

ACV Auctions Holds Annual Stockholders Meeting on Key Proposals

On May 28, 2025, ACV Auctions Inc. held its Annual Meeting of Stockholders, where five key proposals were voted on. These included the election of directors, approval of officer exculpation, share reclassification, executive compensation, and the ratification of Ernst and Young LLP as the independent registered public accounting firm for 2025. The outcomes of these votes are expected to impact the company’s governance structure and financial operations, with changes such as the reclassification of stock potentially affecting shareholder value.