Goldman Sachs reduced its price target for ACV Auctions Inc (NASDAQ:ACVA) to $10 from $13 while retaining a Buy rating, after revising its forward operating estimates in the wake of the company's fourth-quarter 2025 earnings report. The change in guidance followed a review of the quarter's results and management's commentary on strategic investments.
The shares are trading at $5.68, reflecting a 67% decline over the past year and placing the stock substantially below Goldman Sachs' adjusted target. Goldman analyst Eric Sheridan updated the firm's operating outlook to align with the most recent company disclosure.
ACV reported fourth-quarter 2025 revenue of $184 million, which exceeded analyst expectations of $182.1 million and sat at the top end of its own guided range. Adjusted EBITDA was slightly above the high end of guidance. Despite the revenue beat, reported earnings per share were a loss of $0.11, missing the forecast of a loss of $0.01.
Management provided guidance for first-quarter 2026 and the full year 2026 that anticipates revenue growth in the high single-digit to low double-digit range. The company emphasized that it is directing resources toward go-to-market initiatives and platform development as part of a broader push to scale.
Executives highlighted the structural shift in the wholesale automotive market from physical auctions to digital channels and said they plan to accelerate that transition by deploying artificial intelligence tools on the platform. Management also noted recent strategic investments intended to expand dealer solutions and to bundle a wider set of services for dealers as part of long-term growth plans.
Outside the firm, InvestingPro analysis cited in the company's coverage suggests ACV Auctions may be undervalued at current levels. That analysis and other analyst commentary indicate expectations that the company could reach profitability this year despite recent losses, a view that the company’s 23.4% revenue growth momentum appears to support.
In separate broker notes, Citizens reiterated a Market Outperform rating on ACV and maintained a price target of $8.00. Citizens pointed to the value of ACV’s proprietary data derived from its physical presence on dealer lots, saying that this data has predictive utility for pricing.
Goldman Sachs said its revised target reflects the combination of reported results and management’s forward-looking remarks while preserving its positive stance on the equity. These developments underscore a mixed picture for ACV: top-line strength and growth initiatives on one side, and near-term profitability and earnings execution concerns on the other.
Key points
- Goldman Sachs cut its ACV price target to $10 from $13 and maintained a Buy rating after revising forward estimates following Q4 2025 results.
- ACV reported Q4 revenue of $184 million, above the $182.1 million consensus, but posted an EPS loss of $0.11 versus an expected loss of $0.01.
- Management guided to high single-digit to low double-digit revenue growth for Q1 and full-year 2026 while emphasizing investments in go-to-market efforts, platform development, and dealer solutions expansion.
Risks and uncertainties
- Profitability risk - The company reported a Q4 EPS miss, which raises questions about near-term earnings execution for investors focused on the technology and financial performance of marketplace platforms.
- Execution risk from growth investments - Management’s emphasis on scaling and bundling services requires successful implementation of go-to-market initiatives and platform enhancements, which affects the automotive marketplace and dealer solutions sectors.
- Valuation and market reaction - With the stock trading well below analyst targets and having declined materially over the past year, investor sentiment and market volatility could continue to affect the equity’s performance in the short term.