With the business potentially at an important milestone, we thought we'd take a closer look at ACV Auctions Inc.'s (NASDAQ:ACVA) future prospects. ACV Auctions Inc. operates a digital marketplace that connects buyers and sellers for the online auction of wholesale vehicles. The US$3.5b market-cap company posted a loss in its most recent financial year of US$75m and a latest trailing-twelve-month loss of US$79m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on ACV Auctions' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Consensus from 13 of the American Commercial Services analysts is that ACV Auctions is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$75m in 2026. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 66% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won't go into details of ACV Auctions' upcoming projects, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there's one aspect worth mentioning. The company has managed its capital prudently, with debt making up 24% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of ACV Auctions which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at ACV Auctions, take a look at ACV Auctions' company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Valuation: What is ACV Auctions worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether ACV Auctions is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ACV Auctions's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.