My recommendation for ACV Auctions ( ACVA ) is a hold rating. Execution has been solid; ACVA continues to add sellers and buyers, take share, and entrench itself deeper into dealers’ workflow. But the macro pressure is real, overallI focus on long-term investments while incorporating short-term shorts to uncover alpha opportunities. My investment approach revolves around bottom-up analysis, delving into the fundamental strengths and weaknesses of individual companies. My investment duration is the medium to ...

We came across a bullish thesis on ACV Auctions Inc. on Valueinvestorsclub.com by htm815. In this article, we will summarize the bulls’ thesis on ACVA. ACV Auctions Inc.'s share was trading at $7.74 as of December 1st. ACVA’s forward P/E was 40.82 according to Yahoo Finance. Car Dealer, Car Photo by Dieny Portinanni on Unsplash ACV Auctions Inc. (ACVA) operates a digital-first marketplace for dealer-to-dealer vehicle transactions, complemented by services such as transportation, data, and capital. Desig ...

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Company Overview - ACV Auctions reported a total revenue of $735.48 million for the trailing twelve months (TTM) and a net income loss of $72.72 million [4] - As of November 20, 2025, the stock price was $6.64, reflecting a 68.93% decline over the past year [4][8] - The company operates a digital auction marketplace for wholesale vehicles, focusing on online auctions, data analytics, and financing services for automotive dealerships and commercial fleet operators [9] Recent Developments - Inflection Point Investments LLP completely liquidated its position in ACV Auctions, selling 403,796 shares valued at approximately $6.55 million [1][2][8] - The fund's previous stake in ACV Auctions accounted for 12.40% of its assets under management (AUM) before the liquidation [8] - ACV Auctions experienced a 16% year-over-year revenue growth in the third quarter, despite a declining auto dealer wholesale market [7][10] Financial Performance - The company is projected to incur losses between $21 million and $23 million on a GAAP basis for the year, with adjusted losses expected to be between $2 million and $4 million [10] - The dealer wholesale market is anticipated to decline by a mid-single-digit percentage year-over-year in the fourth quarter [10]

Core Insights - ACV showcased its AI-powered data solutions at Used Car Week 2025, emphasizing its comprehensive suite of dealer and consignor solutions, including vehicle acquisition, inventory management, and pricing services [1][2] - The company aims to connect with commercial consignors and demonstrate the effectiveness of its AI-enabled tools, which are designed to reduce risk and enhance performance in the automotive marketplace [2][4] Company Highlights - ACV's participation included multiple educational sessions addressing critical industry challenges such as vehicle transport fraud and pricing science, featuring discussions led by company executives [2][3] - Two ACV team members received nominations for prestigious industry awards, highlighting the company's commitment to leadership and innovation within the remarketing ecosystem [3][4] Industry Context - The conference served as a platform for ACV to engage with industry peers and share insights on the evolving wholesale auto market, including supply and demand dynamics and the integration of technology in operations [2][3] - The focus on data-driven decision-making and the use of technology in pricing and inventory management reflects a broader trend in the automotive industry towards enhanced transparency and efficiency [2][4]

Group 1 - Barclays analyst John Babcock indicates investment opportunities in the automotive dealership sector due to expected profit growth in fiscal year 2026 and a recent decline in valuations [1] - The automotive retail industry is rated as "neutral," but certain companies show potential for above-average performance due to strong growth trends and resilience in adverse economic cycles [1] - Demand for used cars in the U.S. is weak, and auto credit data shows a decrease in demand in the subprime market [1] Group 2 - Companies rated "buy" include Carvana (CVNA.US) for its investment in optimizing online purchasing experience, while CarMax (KMX.US) is rated "sell" due to inconsistent operational performance and potential higher-than-expected loan loss reserves [1] - In the new and used car dealership segment, companies rated "buy" include AutoNation (AN.US), Group 1 Automotive (GPI.US), Lithia Motors (LAD.US), and Penske Automotive (PAG.US) based on strong same-store sales growth and stable operational performance [2] - Asbury Automotive (ABG.US) and Sonic Automotive (SAH.US) are rated "hold" [2]

Core Points - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] Group 1 - The article suggests that users may face blocks if they have an ad-blocker enabled, indicating a need to disable it for proper access [1]

Company Overview - ACV Auctions, an online used car auction platform, experienced a 35% drop in share price following disappointing third-quarter results and a weak financial outlook [1] - The company reported a GAAP loss of $0.14 per share, which was double the expected loss of $0.07 [2] - Third-quarter revenue reached $199.6 million, meeting Wall Street's expectations and reflecting a year-over-year growth of 16.5% [2] Financial Performance - The fourth-quarter revenue guidance is projected at $182 million, nearly 5% below consensus estimates [2] - Full-year EBITDA guidance of $57 million fell significantly short of the anticipated $68.56 million [2] - The combination of an earnings miss and a weaker-than-expected forecast led to a sharp sell-off in the stock [2] Market Reaction - ACV Auctions' shares are noted for their volatility, with 20 moves greater than 5% over the past year, indicating significant market impact from recent news [4] - The recent drop is considered a rare occurrence for the company, highlighting the market's altered perception of its business following the earnings report [4]

Core Insights - ACV Auctions Inc. reported quarterly earnings of $0.07 per share, matching the Zacks Consensus Estimate and showing an increase from $0.04 per share a year ago [1] - The company posted revenues of $199.56 million for the quarter ended September 2025, slightly missing the Zacks Consensus Estimate by 0.17%, but up from $171.33 million year-over-year [2] - ACV Auctions shares have declined approximately 58.6% year-to-date, contrasting with a 15.1% gain in the S&P 500 [3] Earnings and Revenue Performance - The company has surpassed consensus EPS estimates only once in the last four quarters [1] - Over the same period, ACV Auctions has exceeded consensus revenue estimates twice [2] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $193.63 million, and for the current fiscal year, it is $0.24 on revenues of $769.18 million [7] Market Outlook and Industry Context - The stock's future price movement will largely depend on management's commentary during the earnings call [3] - The Zacks Industry Rank places Auction and Valuation Services in the top 8% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and earnings estimate revisions, with ACV Auctions currently holding a Zacks Rank 2 (Buy) [5][6]

Financial Data and Key Metrics Changes - Q3 revenue reached $200 million, growing 16% year over year, compared to a tough comparison of 44% growth in Q3 2024 [5][15] - Adjusted EBITDA was $19 million, with a margin improvement of 280 basis points year over year [15][16] - Non-GAAP net income was $11 million, also at the midpoint of guidance [16] Business Line Data and Key Metrics Changes - Auction and assurance revenue accounted for 56% of total revenue, growing 10% year over year, with auction and assurance ARPU at $508, which declined 3% quarter over quarter [16][17] - Marketplace Services revenue comprised 40% of total revenue, growing 28% year over year, driven by record revenue from ACV Transport and ACV Capital [15][17] - ACV Capital team delivered strong revenue performance with 70% growth in Q3 [11] Market Data and Key Metrics Changes - The dealer wholesale market is expected to decline in the mid-single digits in Q4, reflecting a more challenging market environment [20] - Emerging regions like Southern California and the Midwest saw unit growth exceeding 20% in Q3 [8] Company Strategy and Development Direction - The company focuses on three pillars: growth, innovation, and scale, with a strong emphasis on leveraging AI to enhance marketplace experiences [5][6] - The strategy includes enhancing field engagement models in emerging regions and launching new innovations to drive market share gains [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in recovering the dealer wholesale market despite current macro challenges, emphasizing that it is too early to assume a structural change [27][30] - The company anticipates strong adjusted EBITDA growth of over 100% while continuing to invest in long-term growth objectives [5][21] Other Important Information - The company updated its 2025 guidance to reflect ongoing macro challenges while still expecting 19% year-over-year growth [4][20] - The ACV Guarantee program saw an increase in units sold from 11% in Q2 to 18% in Q3, indicating strong buyer engagement [12] Q&A Session Summary Question: Has the dealer wholesale market changed structurally? - Management believes it is too early to assume a long-term structural change in the dealer wholesale market, which is expected to recover as macro factors stabilize [27] Question: How have competitive dynamics changed? - The company reported significant quarter-over-quarter growth, indicating strong performance against competitors despite market softness [30] Question: Can you explain the moderation in auction ARPU? - Management noted targeted regional pricing campaigns to support market share, expecting ARPU to increase sequentially in Q4 [36][40] Question: What is the outlook for the 2026 wholesale market? - Management suggests assuming a flat market for 2026 due to macro uncertainties, while aiming for mid-teen market share gains [41][45] Question: What is the status of ACV Capital? - The company is taking a cautious approach to ACV Capital, lowering revenue forecasts for Q4 while maintaining confidence in long-term growth [71][73] Question: How is the company leveraging its technology? - The company is using AI to provide accurate pricing and improve decision-making for dealers, enhancing their ability to sell vehicles effectively [102]