ACV Auctions Inc. (NYSE: ACVA)

Sector: Consumer Cyclical Industry: Auto & Truck Dealerships CIK: 0001637873
Market Cap 1.11 Bn
P/B 2.56
P/E -15.31
P/S 1.51
ROIC (Qtr) -11.25
Div Yield % 0.00
Rev 1y % (Qtr) 16.48
Total Debt (Qtr) 220.00 Mn
Debt/Equity (Qtr) 0.51
Add ratio to table...

About

Investment thesis

Bull case

  • Strong tangible asset base of 819.94M provides 3.73x coverage of total debt 220M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 87.37M provides exceptional 10.04x coverage of interest expenses 8.71M, showing strong debt service capability.
  • Cash reserves of 265.34M provide ample 1995.06x coverage of acquisition spending 133000, enabling strategic growth opportunities.
  • Short-term investments of 249.40M provide solid 7.63x coverage of other current liabilities 32.68M, indicating strong liquidity.
  • Tangible assets of 819.94M provide robust 25.09x coverage of other current liabilities 32.68M, indicating strong asset backing.

Bear case

  • Operating cash flow of 87.37M barely covers its investment activities of (152.95M), with a coverage ratio of -0.57, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (152.95M) provide weak support for R&D spending of 178.91M, which is -0.85x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 87.37M shows concerning coverage of stock compensation expenses of 63.29M, with a 1.38 ratio indicating potential earnings quality issues.
  • Operating earnings of (62.95M) show weak coverage of depreciation charges of 42.78M, with a -1.47 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 42.78M relative to operating cash flow of 87.37M, which is 0.49x suggests significant maintenance capital requirements affecting free cash flow.

Product and Service Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Auto & Truck Dealerships
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CVNA Carvana Co. 47.27 Bn 75.15 2.59 5.61 Bn
2 PAG Penske Automotive Group, Inc. 14.12 Bn 40.79 0.69 7.93 Bn
3 LAD Lithia Motors Inc 7.79 Bn 568.00 3.83 14.72 Bn
4 AN Autonation, Inc. 7.53 Bn 11.60 0.27 6.36 Bn
5 KMX Carmax Inc 6.36 Bn 13.90 0.25 17.85 Bn
6 RUSHA Rush Enterprises Inc \Tx\ 5.83 Bn 32.67 1.17 1.52 Bn
7 VVV Valvoline Inc 4.97 Bn 57.58 2.83 2.04 Bn
8 ABG Asbury Automotive Group Inc 4.46 Bn 7.96 0.25 5.99 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.89 0.98
EV to Cash from Ops. EV/CFO 11.92 -162.51
EV to Debt EV to Debt 4.73 1.88
EV to EBIT EV/EBIT -16.54 9.83
EV to EBITDA EV/EBITDA -36.72 25.42
EV to Free Cash Flow [EV/FCF] EV/FCF 22.76 -26.96
EV to Market Cap EV to Market Cap 0.94 1.39
EV to Revenue EV/Rev 1.42 0.83
Price to Book Value [P/B] P/B 2.56 1.58
Price to Earnings [P/E] P/E -15.31 30.09
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 3.68
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.11
Dividend per Basic Share Div per Share (Qtr) 0.00 0.44
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -73.18
Interest Coverage Int. cover (Qtr) -7.23 -26.23
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -23.83 -715.33
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 5.08 50.36
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 3.96
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 13.91 -79.89
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 45.20 20.49
EBIT Growth (1y) % EBIT 1y % (Qtr) 14.53 -21.28
EBT Growth (1y) % EBT 1y % (Qtr) 6.01 126.01
EPS Growth (1y) % EPS 1y % (Qtr) 10.64 214.23
FCF Growth (1y) % FCF 1y % (Qtr) 437.42 49.63
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 27.77 90.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.63 1.29
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.56 0.23
Current Ratio Curr Ratio (Qtr) 1.62 1.22
Debt to Equity Ratio Debt/Equity (Qtr) 0.51 0.27
Interest Cover Ratio Int Coverage (Qtr) -7.23 -26.23
Times Interest Earned Times Interest Earned (Qtr) -7.23 -26.23
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -2.70 -1,676.65
EBIT Margin % EBIT Margin % (Qtr) -8.56 -3,422.20
EBT Margin % EBT Margin % (Qtr) -9.74 -3,435.14
Gross Margin % Gross Margin % (Qtr) 53.30 35.90
Net Profit Margin % Net Margin % (Qtr) -9.90 -3,399.55