ACV Auctions Plummets 17.7%: Earnings Volatility and Sector Headwinds Ignite Turbulence

Summary
• ACV Auctions (ACVA) tumbles 17.7% to $10.98, its lowest since the 52-week low of $10.26
• Q2 revenue of $194M misses estimates by 1.2%, with full-year guidance cut to $770M
• MACD and RSI signal oversold conditions, while Bollinger Bands show price near lower bound
• Sector peers like Copart (CPRT) trade flat, masking ACVA’s sharp underperformance

ACV Auctions’ stock has plunged to a 52-week low amid a bearish technical setup and earnings-driven pessimism. The company’s Q2 results, while showing margin progress, fell short of revenue expectations and triggered a sharp selloff. With the stock trading near its intraday low of $10.26, traders are scrutinizing whether this is a buying opportunity or a deeper correction.

Earnings Miss and Guidance Cut Spur Sharp Selloff
ACV Auctions’ 17.7% intraday drop stems from a combination of revenue underperformance and revised guidance. Despite 21% year-over-year revenue growth to $194 million, the $193.7M result missed analyst estimates by 1.2%. Management slashed full-year revenue guidance to $770M from $775M, citing macroeconomic headwinds like elevated trade retention rates and soft conversion rates. The adjusted EBITDA guidance of $68–72M, while up 150% YoY, fell short of the $71.18M midpoint estimated by analysts. This duality of margin progress and volume weakness triggered a sharp repricing of the stock.

Automotive Retail Sector Stabilizes as ACVA Underperforms
The Automotive Retail sector, led by Copart (CPRT), remains relatively stable despite ACVA’s selloff. CPRT’s intraday price change of -0.28% contrasts with ACVA’s -17.7% plunge, highlighting divergent investor sentiment. While ACVA’s guidance cut reflects broader industry challenges like dealer inventory retention, its peers have not faced similar downward revisions. This suggests ACVA’s decline is more stock-specific, tied to its earnings execution and guidance, rather than a sector-wide selloff.

Options and ETFs for Navigating ACVA’s Volatility
• MACD: -0.56 (bearish), RSI: 28.0 (oversold), Bollinger Bands: $10.26–$15.87 (price near lower bound)
• 30D MA: $15.11 (price below), Support/Resistance: $16.50 (key resistance), $10.26 (support)

ACVA’s technicals suggest a short-term oversold condition but a bearish trend. Traders should watch the $10.26 support level and the 52-week low of $10.26 as critical thresholds. The stock’s RSI at 28.0 and MACD below zero indicate potential for a rebound, but the Kline pattern’s bearish bias cautions against over-optimism. A leveraged ETF like XLB (Materials Select Sector SPDR) could offer indirect exposure to industrial trends affecting ACVA’s business.

Top Options Contracts:
• ACVA20250919P10 (Put, $10 strike, 9/19 expiry):
- IV: 56.51% (moderate), Leverage: 31.51%, Delta: -0.26 (moderate), Theta: -0.005 (low decay), Gamma: 0.159 (high sensitivity)
- Payoff at 5% downside: $5.98 (max gain if price drops to $10.43)
- This put offers high leverage and gamma, ideal for a bearish bet if the stock breaks below $10.26.
• ACVA20250919C12.5 (Call, $12.5 strike, 9/19 expiry):
- IV: 57.81% (moderate), Leverage: 31.51%, Delta: 0.29 (moderate), Theta: -0.012 (moderate decay), Gamma: 0.165 (high sensitivity)
- Payoff at 5% downside: -$1.55 (limited loss if price drops to $10.43)
- This call provides upside potential if the stock rebounds above $12.50, with high gamma to benefit from volatility.

Action: Aggressive bears should prioritize the ACVA20250919P10 for a short-term bearish play, while cautious bulls may use the ACVA20250919C12.5 for a limited-risk rebound trade.

Backtest ACV Auctions Stock Performance
The ACV ETF experienced a significant intraday plunge of -18% on August 11, 2020. However, the subsequent 3-day, 10-day, and 30-day win rates were 50.08%, 55.98%, and 56.78%, respectively. This indicates that while the ETF declined significantly in the short term, it recovered positively in the medium to long term. The maximum return during the backtest period was 1.35%, which occurred on day 59 after the plunge, suggesting that the ETF had a favorable recovery period.

ACVA at Inflection Point: Watch Sector Leader and Key Levels
ACV Auctions’ sharp selloff reflects a mix of earnings underperformance and macroeconomic caution. While technicals suggest a potential rebound from oversold levels, the bearish Kline pattern and guidance cut signal ongoing risks. Investors should monitor the $10.26 support and Copart’s (CPRT) -0.28% move as sector barometers. A breakdown below $10.26 could trigger further declines, while a rebound above $12.50 might validate the call option’s potential. Act now: Position in the ACVA20250919P10 for bearish exposure or watch for a sector-driven bounce.