ACV Auctions Inc (ACVA) PT Lowered to $41 as Jefferies Sees One Issue with the Quarter
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Jefferies analyst John Colantuoni lowered the price target on ACV Auctions Inc (NASDAQ: ACVA) to $41.00 (from $45.00) after reporting 19% revenue upside and $14M EBITDA upside in its first quarter as publicly traded company. Auction revenue was nearly 30% ahead of expectations, driven by unit growth 12% above. A tight wholesale market contributed to higher GMV per unit, which was up 33% y/y (vs. cons 5% y/y) and provided a tailwind to the variable component of ACV's auction fees.
The analyst reiterated a Buy rating, noting there was only one concern for the quarter, profit guidance. He stated "ACV is guiding full-year EBITDA to a loss of $(82)M to $(79)M, which is $6M above prior consensus but is less than half of the $14M beat in 1Q. In addition, guidance implies EBITDA margin worsens from -18% in 1Q to -28% in the back three quarters, which is also 300 bp below prior consensus. We think ACV is using 1Q upside as an opportunity to extend its leading position while also leaving room for upside. However, incremental investments may also be interpreted as a potential reaction to solid performance at competitors (CarOffer, BackLotCars) and recent actions by other players to mirror certain ACV inspection functionality like the undercarriage imaging and engine recordings.".
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