What Happened?
Shares of online used car auction platform ACV Auctions (NASDAQ: ACVA) fell 15.7% in the afternoon session after the company reported second-quarter results that missed revenue expectations and lowered its full-year sales forecast. For the quarter, revenue was $193.7 million, a 1.2% miss against Wall Street estimates. The outlook was also concerning, as the company's revenue guidance for the next quarter came in 1.9% below analysts' expectations. Compounding the issue, ACV Auctions trimmed its full-year revenue guidance to $770 million at the midpoint, down from $775 million previously. Although its GAAP loss per share of $0.04 beat estimates, this was not enough to outweigh the weaker revenue performance and reduced outlook, which pointed to a slowdown.
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What Is The Market Telling Us
ACV Auctions’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. But moves this big are rare even for ACV Auctions and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 9.2% on the news that the company reported weak fourth-quarter results, and provided full-year revenue and EBITDA guidance below Wall Street's estimates. The outlook assumes a flat dealer wholesale market, which may limit upside potential in the near term. In addition, margins deteriorated and the company burned cash during the quarter. On the other hand, ACVA blew past analysts' EBITDA expectations this quarter. It also expanded its number of units sold, leading to a revenue beat. Still, this was a softer quarter due to the outlook.
ACV Auctions is down 46.9% since the beginning of the year, and at $11.13 per share, it is trading 52% below its 52-week high of $23.17 from December 2024. Investors who bought $1,000 worth of ACV Auctions’s shares at the IPO in March 2021 would now be looking at an investment worth $356.
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