Why Did ACV Auctions Inc. (ACVA) Soar 10.12% on Strong Q1 Earnings?

ACV Auctions Inc. (ACVA) rose 10.12% in pre-market trading on May 8, 2025, driven by strong first-quarter earnings and revenue growth.

ACV Auctions reported a 25.4% year-over-year increase in revenue for the first quarter of 2025, meeting Wall Street's expectations. The company's earnings per share (EPS) for the quarter were $0.04, surpassing the consensus estimate of $0.02. This marks a significant improvement from the break-even earnings per share reported a year ago. The company's revenue for the quarter was $182.7 million, exceeding the consensus estimate by 0.16%.

Goldman Sachs raised its price target for ACV Auctions to $26, reflecting a 25% increase in revenue compared to the previous year. This growth was driven by a 28% rise in auction and assurance revenue, highlighting the company's strong market position and effective dealer solutions.

Despite the strong quarterly performance, ACV Auctions shares have declined by approximately 28.5% since the beginning of the year, underperforming the broader market. The company's earnings outlook remains unfavorable, with current consensus EPS estimates at $0.07 for the coming quarter and $0.25 for the current fiscal year. Investors will be closely monitoring how these estimates evolve in the coming days, as they can provide insights into the company's future stock performance.