Stephens cuts ACV Auctions stock price target to $11.50 on high expectations

Published 12/08/2025, 13:20
Stephens cuts ACV Auctions stock price target to $11.50 on high expectations

Investing.com - Stephens lowered its price target on ACV Auctions Inc (NASDAQ:ACVA) to $11.50 from $16.00 on Tuesday while maintaining an Equal Weight rating following the company’s second-quarter earnings report. The stock, which has declined nearly 38% over the past six months and is currently trading at $13.35, remains volatile according to InvestingPro data.

ACV Auctions reported revenue of $193.7 million for the second quarter of 2025, representing 20.6% growth year-over-year, but falling 1.2% short of Street estimates. The company sold 210,400 units during the quarter, a 12.8% increase that nonetheless came in 4.1% below analyst expectations. Despite recent challenges, InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.5 and more cash than debt on its balance sheet.

The online automotive marketplace posted EBITDA of $18.6 million, showing substantial growth of 162.5% compared to the same period last year, though this figure was 3.6% below consensus estimates. The company cited a challenging macro environment that worsened in June before showing slight improvement in July.

Stephens noted that ACV’s current valuation of approximately 32 times 2025 EBITDA estimates and 20 times 2026 estimates implies expectations for 100% EBITDA growth in 2026, creating a high bar for performance. The firm emphasized that tougher comparisons in the third and fourth quarters of 2025 make a quick recovery unlikely.

The research firm characterized 2026 as a "pivotal year" for ACV Auctions while clarifying that the second-quarter results don’t indicate fundamental problems with the business, but rather reflect the challenges of meeting elevated market expectations amid the company’s "robust valuation." According to InvestingPro’s comprehensive analysis, which includes 12 additional key insights and a detailed Fair Value assessment, the stock currently appears slightly undervalued. Subscribers can access the full Pro Research Report for deeper insights into ACV’s growth trajectory and valuation metrics.

In other recent news, ACV Auctions Inc reported its second-quarter 2025 earnings, revealing a 21% year-over-year revenue growth, reaching $194 million. Despite this increase, the company’s earnings per share did not meet forecasts, which has influenced analysts’ outlooks. Needham adjusted its price target for ACV Auctions to $16, citing slower growth expectations while maintaining a Buy rating. Similarly, Citizens JMP lowered its price target to $18, highlighting that revenue and EBITDA fell short of consensus estimates by $1.9 million and $0.2 million, respectively. Goldman Sachs also revised its price target to $21, noting that revenue was at the lower end of the company’s guidance due to headwinds in the latter part of the quarter, although these challenges began to reverse in July. These developments reflect the mixed performance of ACV Auctions in the second quarter, with analysts maintaining varying degrees of optimism for the company’s future.

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