ACV Auctions Inc. (NASDAQ:ACVA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ACV Auctions Inc. operates a digital marketplace that connects buyers and sellers for the online auction of wholesale vehicles. With the latest financial year loss of US$75m and a trailing-twelve-month loss of US$78m, the US$3.0b market-cap company amplified its loss by moving further away from its breakeven target. 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.

ACV Auctions is bordering on breakeven, according to the 13 American Commercial Services analysts. They expect the company to post a final loss in 2025, before turning a profit of US$88m in 2026. So, the company is predicted to breakeven approximately 2 years from today. 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 55% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for ACV Auctions given that this is a high-level summary, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there's one aspect worth mentioning. The company has managed its capital prudently, with debt making up 27% 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:

This article is not intended to be a comprehensive analysis on ACV Auctions, so if you are interested in understanding the company at a deeper level, take a look at ACV Auctions' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

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.