What Happened?
Shares of online used car auction platform ACV Auctions (NASDAQ: ACVA) fell 15% in the afternoon session after the company reported fourth-quarter 2025 results where its weak guidance for the upcoming quarter and year overshadowed a revenue beat.
The company's sales of $183.6 million slightly topped the $182 million analysts had forecast, and its GAAP loss of $0.11 per share met Wall Street's expectations. However, investors were more focused on the company's outlook. ACV's revenue guidance for the first quarter of 2026 was $202 million, narrowly missing estimates of $203.7 million. Furthermore, its full-year EBITDA guidance of $75 million also fell short of the $78.13 million analysts had anticipated. The weaker-than-expected forecast for future performance prompted a sell-off, despite the company exceeding Q4 expectations for revenue and adjusted EBITDA.
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What Is The Market Telling Us
ACV Auctions’s shares are very volatile and have had 26 moves greater than 5% over the last year. But moves this big are rare even for ACV Auctions and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 2.6% on the news that investor fears over artificial intelligence disrupting the software industry sparked a broad sell-off. The anxiety stemmed from the rapid adoption of new 'agentic AI' tools, which some investors believed could dismantle traditional Software-as-a-Service (SaaS) business models. This 'AI Panic' led to indiscriminate selling across the sector. The market move reflected growing concerns about the downside of the AI boom for established software companies.
ACV Auctions is down 42.7% since the beginning of the year, and at $4.75 per share, it is trading 72.6% below its 52-week high of $17.32 from February 2025. Investors who bought $1,000 worth of ACV Auctions’s shares at the IPO in March 2021 would now be looking at an investment worth $151.97.
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