ACV Auctions Inc. (ACVA): A Bull Case Theory 

We came across a bullish thesis on ACV Auctions Inc. on Valueinvestorsclub.com by htm815. In this article, we will summarize the bulls’ thesis on ACVA. ACV Auctions Inc.’s share was trading at $7.74 as of December 1st. ACVA’s forward P/E was 40.82 according to Yahoo Finance.

Car Dealer, Car

Photo by Dieny Portinanni on Unsplash

ACV Auctions Inc. (ACVA) operates a digital-first marketplace for dealer-to-dealer vehicle transactions, complemented by services such as transportation, data, and capital. Designed to disrupt traditional physical auctions dominated by Manheim and ADESA, ACVA has steadily gained market share while innovating rapidly to address dealer pain points.

Despite lowering its Q2 revenue and EBITDA guidance due to dealers holding inventory amid tariff uncertainty, the underlying business remains strong, with marketplace listings and dealer retention meeting targets and unit growth adjusting for seasonal trends implying solid performance. While competitors like OPENLANE have reported higher growth, much of that reflects geographic and vehicle-type differences rather than structural outperformance, and ACVA remains well-positioned in the U.S. market.

The company is supported by multiple catalysts. First, as dealer behavior normalizes, ACVA is expected to outperform the broader market, capturing more dealers and wallet share. Second, the dealer-to-dealer market, currently 15-20% below pre-COVID volumes, is poised to stabilize, and digital adoption, still low at 20-30%, offers long-term growth potential, with ACVA leading in capturing this digital shift.

Third, ACVA is deploying AI-powered inspection tools and its Viper drive-through solution to help dealers source consumer vehicles efficiently, strengthening loyalty and increasing volumes. Fourth, a commercial rollout leveraging strategically located yards and integrated technology is expected to scale from 60k units in 2025 to 225k, expanding the total addressable market. Finally, operating leverage is poised to improve as these initiatives scale, with incremental margins in the 35-40% range achievable.

Trading at less than 5x projected $350 million EBITDA, ACVA’s combination of strong fundamentals, technology leadership, market expansion, and operating leverage offers significant upside potential, while risks include slow digital adoption, competitor execution, and ongoing industry headwinds.

Previously we covered a bullish thesis on Carvana Co. (CVNA) by Investing City in May 2025, which highlighted its vertically integrated e-commerce platform, financing capabilities, and operational pivot toward profitability. The company’s stock price has appreciated by 17.15% since our coverage. The thesis still stands, while htm815 shares a similar but emphasizes ACV Auctions’ digital-first marketplace, AI tools, and commercial rollout driving growth.

ACV Auctions Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held ACVA at the end of the second quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of ACVA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ACVA and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.