ACV Auctions Inc.

ACV Auctions reported second-quarter revenue of $213.9 million, missing analyst estimates of $215.2 million and prompting a negative market reaction. Management attributed the shortfall to a contracting dealer wholesale market and compressed conversion rates, with CEO George Chamoun citing a price disconnect between sellers and buyers as a major headwind. Despite the miss, the company posted 10.4% year-on-year revenue growth, adjusted EPS of $0.06 versus estimates of $0.05, and adjusted EBITDA of $20.77 million, beating expectations. ACV reconfirmed full-year revenue guidance of $850 million at the midpoint and EBITDA guidance of $75 million at the midpoint. During the earnings call, analysts pressed management on hiring plans, with Chamoun saying sales and inspection roles will rise at least 15-20% by year-end, and on ViPR adoption, where early users report acquiring 20-50 more cars per month.

ACV Auctions shares have fallen 16.4% over the past six months to $7.30, underperforming the S&P 500's 9% gain. Analysts highlight two concerns: a low gross margin averaging 27.3% over the last two years, indicating weak structural profitability, and high sales and marketing spend consuming 81.8% of gross profit, reflecting poor marketing efficiency. The stock trades at 14 times forward EV/EBITDA, and the analysis suggests limited upside relative to potential downside. Investors are advised to consider other opportunities, such as an all-weather company that owns Taco Bell.

The 46 consumer internet stocks tracked reported a satisfactory first quarter, with revenues beating analysts' consensus estimates by 1.2% while next quarter's revenue guidance came in 0.6% below. Expedia posted revenues of $3.43 billion, up 14.7% year on year and exceeding expectations by 2.2%, with EBITDA also beating estimates and next-quarter revenue guidance slightly topping forecasts. Sea delivered the biggest beat, with revenues of $7.33 billion up 43.2% year on year and outperforming expectations by 10.1%, alongside strong EBITDA and user growth to 72.6 million. Shutterstock was the weakest, with revenues of $199.2 million down 17.9% year on year and missing estimates by 10.1%, accompanied by a significant EBITDA miss. ACV Auctions reported revenues of $204.2 million up 11.8% year on year, beating by 1.1%, but next-quarter EBITDA guidance missed significantly. Coupang's revenues of $8.50 billion rose 7.5% year on year, slightly missing estimates by 0.6%, though EBITDA beat solidly, and active buyers grew 2.1% to 23.9 million.

ACV Auctions shares fell sharply after the company issued a weaker-than-expected outlook for the first quarter of 2026, according to the Meridian Hedged Equity Fund's first-quarter 2026 investor letter. The fund, managed by ArrowMark Partners, maintained its position in the digital automotive marketplace despite the decline, citing ACV's integrated ecosystem, high customer retention, and potential to benefit from ongoing digitization in the wholesale automotive market. Management attributed the weak outlook to challenging macroeconomic conditions causing depreciating vehicle values, lower conversion rates, and elevated arbitration costs. ACV Auctions reported first-quarter 2026 revenue of $204 million, a 12% year-over-year increase, even as severe weather led to a mid-single-digit decline in dealer wholesale volumes. The stock closed at $6.93 per share on June 26, 2026, with a market capitalization of $1.21 billion, and has lost 57.27% over the past 52 weeks.