What Happened?
Shares of online used car auction platform ACV Auctions (NASDAQ: ACVA) fell 3.8% in the afternoon session after 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 fell 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.
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What Is The Market Telling Us
ACV Auctions’s shares are quite volatile and have had 15 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 26 days ago when the stock gained 3.2% on the news that markets continued to rally as the latest inflation data reinforced expectations for a Federal Reserve rate cut as soon as September. The latest Consumer Price Index (CPI) report for July showed inflation holding steady, reinforcing market expectations that the Federal Reserve could begin cutting interest rates as soon as September. Lower interest rates generally stimulate the economy by making borrowing cheaper for consumers and businesses. This can lead to increased consumer spending and e-commerce activity, which directly benefits online retail and marketplace companies. The positive economic outlook fueled a broad-based rally, pushing the S&P 500 and Nasdaq to new record highs and lifting most growth-oriented technology stocks.
ACV Auctions is down 45.5% since the beginning of the year, and at $11.41 per share, it is trading 50.8% 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 $365.11.
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