What Happened?
Shares of online used car auction platform ACV Auctions (NASDAQ: ACVA) fell 4.1% in the afternoon session after a key competitor, Cox Automotive, announced a strategic acquisition that intensifies competition in the vehicle inspection market.
Cox Automotive, which owns the major wholesale marketplace Manheim, has acquired full ownership of Alliance Inspection Management (AiM), a recognized leader in vehicle inspection services. This acquisition is expected to significantly enhance Manheim's capabilities and expand its offsite presence, extending its reach well beyond its traditional locations. For ACV Auctions, which operates in the same digital marketplace and automotive services space, a strengthened competitor could create significant headwinds.
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What Is The Market Telling Us
ACV Auctions’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 3.8% on the news that investors continued to sell off the stock following its second-quarter 2025 earnings report, which missed analyst expectations. The online vehicle marketplace reported revenues of $193.7 million, an increase of 20.6% year-over-year, but still fell 1.2% short of Wall Street forecasts. The company also posted a significant miss on the number of marketplace units sold and provided weak EBITDA guidance for the upcoming quarter. Following the report, the stock has fallen 11.5%. The disappointing results prompted several analysts to lower their price targets for the stock. Firms including Goldman Sachs, Stephens, and Citigroup adjusted their targets, citing the growth miss and headwinds the company faced in the latter half of the quarter, contributing to the negative investor sentiment.
ACV Auctions is down 50.3% since the beginning of the year, and at $10.41 per share, it is trading 55.1% 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 $332.96.
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