Investors one-year losses grow to 69% as the stock sheds US$340m this past week

By
Simply Wall St
Published
May 14, 2022
NasdaqGS:ACVA
Source: Shutterstock

The nature of investing is that you win some, and you lose some. And there's no doubt that ACV Auctions Inc. (NASDAQ:ACVA) stock has had a really bad year. To wit the share price is down 69% in that time. ACV Auctions may have better days ahead, of course; we've only looked at a one year period. Unfortunately the share price momentum is still quite negative, with prices down 37% in thirty days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

If the past week is anything to go by, investor sentiment for ACV Auctions isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for ACV Auctions

ACV Auctions isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

ACV Auctions grew its revenue by 67% over the last year. That's well above most other pre-profit companies. In contrast the share price is down 69% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
NasdaqGS:ACVA Earnings and Revenue Growth May 14th 2022

ACV Auctions is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

A Different Perspective

ACV Auctions shareholders are down 69% for the year, even worse than the market loss of 9.0%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 15%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand ACV Auctions better, we need to consider many other factors. For example, we've discovered 2 warning signs for ACV Auctions that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.