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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on ACVA

ACV Auctions' recent performance was impacted by challenging market conditions, despite delivering record revenue and unit volume. The company's Q3 earnings met expectations, with quarterly earnings of $0.07 per share. Increased market share gains and strong adoption of Marketplace Services drove results. Additionally, ACV showcased AI-powered data solutions at Used Car Week 2025, highlighting its suite of dealer and consignor solutions. However, Inflection Point Investments sold off 403,796 shares, equating to a net position change of approximately $6.55 million.

1.c. Company Highlights

2. ACV's Q3 2025 Earnings: Strong Revenue Growth Amidst Challenging Market Conditions

ACV's Q3 2025 revenue reached $200 million, a 16% year-over-year growth, driven by a 10% increase in vehicles sold, totaling 218,000 units. The revenue growth was supported by the company's solid execution in its dealer wholesale business, expansion of its dealer partner network, and leveraging of its value-added dealer solutions. The earnings per share (EPS) came in at $0.07, in line with analyst estimates. The company's adjusted EBITDA growth was significant, with the management updating its 2025 guidance to reflect strong top-line growth of 19% year-over-year and adjusted EBITDA growth of over 100%.

Publication Date: Nov -08

📋 Highlights
  • Q3 Revenue Growth:: Achieved $200 million in revenue, a 16% year-over-year increase with 218,000 vehicles sold (10% YoY growth).
  • ACV Capital Performance:: Delivered 70% revenue growth in Q3, marking the fourth consecutive quarter of accelerated expansion.
  • Emerging Region Growth:: Unit sales in Southern California and Midwest regions surged over 20% in Q3, outpacing established markets.
  • Marketplace Engagement:: Facilitated 10,000 sellers and 14,000 buyers transacting on the platform, leveraging AI-driven pricing and AI-optimized services.

Revenue Growth Drivers

The revenue growth was driven by the company's marketplace experience, which leverages AI to attract new buyers and sellers, increasing penetration and wallet share. The company reported over 10,000 sellers and 14,000 buyers transacting in its marketplace. Additionally, ACV Transport and Capital delivered record revenue performance, with ACV Capital growing 70% in Q3, marking the fourth consecutive quarter of accelerated growth. As George Chamoun stated, "Our differentiated marketplace experience is showing up in the numbers," highlighting the effectiveness of the company's strategies.

Valuation Metrics

Looking at the valuation metrics, ACV's P/S Ratio stands at 1.31, indicating a relatively reasonable valuation given the company's growth prospects. The EV/EBITDA ratio is -49.94, which may raise concerns about the company's profitability. However, the management's guidance suggests a significant improvement in adjusted EBITDA growth. The ROE and ROIC are negative, at -14.41% and -9.62%, respectively, indicating that the company still faces challenges in terms of profitability.

Outlook and Guidance

The company expects Q4 revenue to be in the range of $180 million to $184 million, representing a growth of 13% to 15%. The adjusted EBITDA is expected to be in the range of $5 million to $7 million. For 2026, the management assumes a flat dealer wholesale market and is enhancing its field engagement model in certain emerging regions. Analysts estimate revenue growth of 24.1% for next year, indicating a positive outlook for the company's prospects. With the company's strategic initiatives and growth drivers, it appears well-positioned to capitalize on the opportunities in the market.

3. NewsRoom

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Inflection Point Sells Off 403K ACVA Shares Worth $6.5 Million

Nov -23

Source: fool.com

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ACV Showcases AI-Powered Data Solutions at Used Car Week 2025

Nov -17

Source: businesswire.com

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Head-To-Head Survey: Marquee Raine Acquisition (OTCMKTS:MRACU) vs. ACV Auctions (NYSE:ACVA)

Nov -15

Source: defenseworld.net

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ACV Auctions Inc. (ACVA) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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ACV Auctions Inc. (ACVA) Meets Q3 Earnings Estimates

Nov -06

Source: zacks.com

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ACV Announces Third Quarter 2025 Results

Nov -05

Source: businesswire.com

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MOL Global (OTCMKTS:MOLGY) & ACV Auctions (NYSE:ACVA) Critical Analysis

Oct -24

Source: defenseworld.net

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ACV to Report Third Quarter 2025 Financial Results on November 5, 2025

Oct -20

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.20%)

6. Segments

Auction Marketplace

Expected Growth: 10.27%

ACV Auctions Inc.'s Auction Marketplace growth is driven by increasing adoption of digital marketplaces, rising demand for used vehicles, and expanding dealer networks. Additionally, the company's focus on transparency, efficiency, and data-driven decision making is attracting more buyers and sellers, further fueling growth.

Other Marketplace

Expected Growth: 10.27%

ACV Auctions Inc.'s Other Marketplace segment growth of 10.27% is driven by increasing adoption of digital marketplaces, rising demand for used vehicles, expansion into new geographic markets, and strategic partnerships with dealerships and OEMs. Additionally, the company's focus on providing a seamless user experience, robust inventory management, and competitive pricing also contribute to its growth momentum.

Customer Assurance

Expected Growth: 9.9%

ACV Auctions Inc.'s 9.9% Customer Assurance growth is driven by increasing adoption of digital auction platforms, rising demand for vehicle inspections and condition reports, and expanding partnerships with dealerships and OEMs. Additionally, investments in AI-powered vehicle valuation and enhanced customer experience contribute to the growth.

Data Services

Expected Growth: 9.9%

ACV Auctions Inc.'s 9.9% growth in Data Services is driven by increasing adoption of digital marketplaces, rising demand for vehicle inspection and valuation data, expansion into new markets, and strategic partnerships with dealerships and OEMs, further fueled by investments in AI-powered analytics and data visualization tools.

7. Detailed Products

Vehicles

ACV Auctions Inc. provides a platform for dealers to purchase vehicles at auction, offering a wide range of makes and models.

Condition Reports

ACV Auctions provides detailed condition reports for vehicles, including photos and descriptions of any damage or issues.

Inspection Services

ACV Auctions offers inspection services to verify the condition of vehicles, providing an added layer of assurance for buyers.

Transportation Services

ACV Auctions provides transportation services to help dealers get vehicles from the auction to their dealership.

Financing Options

ACV Auctions offers financing options to help dealers purchase vehicles at auction.

Market Data and Analytics

ACV Auctions provides market data and analytics to help dealers make informed purchasing decisions.

8. ACV Auctions Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for ACV Auctions Inc. is medium, as there are some alternatives available in the market, but they are not very attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for ACV Auctions Inc. is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for ACV Auctions Inc. is medium, as the company relies on a few key suppliers, but has some flexibility in its supply chain.

Threat Of New Entrants

The threat of new entrants for ACV Auctions Inc. is high, as the market is attractive and there are low barriers to entry.

Intensity Of Rivalry

The intensity of rivalry for ACV Auctions Inc. is high, as the market is highly competitive and there are many established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 20.35%
Debt Cost 3.95%
Equity Weight 79.65%
Equity Cost 11.75%
WACC 10.16%
Leverage 25.55%

11. Quality Control: ACV Auctions Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Penske Automotive Group

A-Score: 6.5/10

Value: 6.9

Growth: 7.1

Quality: 4.8

Yield: 5.0

Momentum: 7.0

Volatility: 8.0

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Asbury Automotive Group

A-Score: 5.4/10

Value: 7.9

Growth: 7.4

Quality: 4.0

Yield: 0.0

Momentum: 7.0

Volatility: 6.0

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Group 1 Automotive

A-Score: 5.4/10

Value: 6.6

Growth: 7.8

Quality: 3.5

Yield: 0.0

Momentum: 8.0

Volatility: 6.3

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Lithia Motors

A-Score: 5.3/10

Value: 6.7

Growth: 6.7

Quality: 5.2

Yield: 1.0

Momentum: 6.0

Volatility: 6.0

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CarMax

A-Score: 3.4/10

Value: 6.8

Growth: 5.6

Quality: 2.5

Yield: 0.0

Momentum: 1.0

Volatility: 4.7

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ACV Auctions

A-Score: 3.4/10

Value: 6.5

Growth: 5.4

Quality: 4.4

Yield: 0.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.15$

Current Price

8.15$

Potential

-0.00%

Expected Cash-Flows