Adversity is less terrifying than hope: ACV Auctions Inc. (ACVA)

ACV Auctions Inc. (NASDAQ: ACVA) stock fell -0.11% on Monday to $8.97 against a previous-day closing price of $8.98. With 0.5 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.1 million shares. During the session, the Auto & Truck Dealerships company that operates in wider Consumer Cyclical sector, reached to the highest price of $9.07 whereas the lowest price it dropped to was $8.92. The 52-week range on ACVA shows that it touched its highest point at $15.90 and its lowest point at $6.10 during that stretch. It currently has a 1-year price target of $12.79.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ACVA was down-trending over the past week, with a drop of -1.75%, but this was up by 2.51% over a month. Three-month performance surged to 4.55% while six-month performance rose 25.28%. The stock lost -43.66% in the past year, while it has gained 9.26% so far this year. A look at the trailing 12-month EPS for ACVA yields -0.66 with Next year EPS estimates of -0.50. For the next quarter, that number is -0.19. This implies an EPS growth rate of -134.40% for this year and 26.50% for next year.

Float and Shares Shorts:

At present, 157.26 million ACVA shares are outstanding with a float of 116.11 million shares on hand for trading. On Oct 13, 2022, short shares totaled 8.07 million, which was 5.11% higher than short shares on Sep 14, 2022. In addition to Mr. George G. Chamoun as the firm’s CEO & Director, Mr. Vikas Mehta serves as its Chief Operating Officer.

Institutional Ownership:

Through their ownership of 91.22% of ACVA’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 50.43% of ACVA, in contrast to 45.65% held by mutual funds. Shares owned by individuals account for 2.11%. As the largest shareholder in ACVA with 14.82% of the stake, ArrowMark Colorado Holdings LLC holds 17,066,705 shares worth 17,066,705. A second-largest stockholder of ACVA, The Vanguard Group, Inc., holds 10,239,316 shares, controlling over 8.89% of the firm’s shares. Atreides Management LP is the third largest shareholder in ACVA, holding 10,134,476 shares or 8.80% stake. With a 4.18% stake in ACVA, the Vanguard Explorer Fund is the largest stakeholder. A total of 4,812,393 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 3.10% of ACVA stock, is the second-largest Mutual Fund holder. It holds 3,567,917 shares valued at 29.29 million. Vanguard Small Cap Index Fund holds 2.63% of the stake in ACVA, owning 3,032,032 shares worth 24.89 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ACVA since 16 analysts follow the stock currently. There are 14 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ACVA analysts setting a high price target of $15.00 and a low target of $10.00, the average target price over the next 12 months is $12.79. Based on these targets, ACVA could surge 67.22% to reach the target high and rise by 11.48% to reach the target low. Reaching the average price target will result in a growth of 42.59% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ACVA will report FY 2022 earnings on 02/15/2024. Analysts have provided yearly estimates in a range of -$0.39 being high and -$0.43 being low. For ACVA, this leads to a yearly average estimate of -$0.41. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. ACV Auctions Inc. surprised analysts by $0.04 when it reported -$0.09 EPS against a consensus estimate of -$0.13. The surprise factor in the prior quarter was $0.04. Based on analyst estimates, the high estimate for the next quarter is -$0.08 and the low estimate is -$0.21. The average estimate for the next quarter is thus -$0.14.

Summary of Insider Activity:

Insiders traded ACVA stock several times over the past three months with 6 Buys and 12 Sells. In these transactions, 3,313,254 shares were bought while 3,494,869 shares were sold. The number of buy transactions has increased to 18 while that of sell transactions has risen to 28 over the past year. The total number of shares bought during that period was 10,121,405 while 9,506,610 shares were sold.

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