Critical Review: ACV Auctions (NASDAQ:ACVA) & Rightscorp (OTCMKTS:RIHT)

Rightscorp (OTCMKTS:RIHT) and ACV Auctions (NASDAQ:ACVA) are both business services companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings for Rightscorp and ACV Auctions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rightscorp	0	0	0	0	N/A
ACV Auctions	0	2	5	0	2.71

ACV Auctions has a consensus price target of $21.57, indicating a potential upside of 15.11%. Given ACV Auctions’ higher possible upside, analysts clearly believe ACV Auctions is more favorable than Rightscorp.

Insider and Institutional Ownership

0.1% of Rightscorp shares are owned by institutional investors. Comparatively, 88.6% of ACV Auctions shares are owned by institutional investors. 8.5% of ACV Auctions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Rightscorp and ACV Auctions”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rightscorp	$290,000.00	12.14	-$410,000.00	N/A	N/A
ACV Auctions	$481.23 million	6.49	-$75.26 million	($0.48)	-39.04

Rightscorp has higher earnings, but lower revenue than ACV Auctions.

Risk and Volatility

Rightscorp has a beta of -0.18, indicating that its share price is 118% less volatile than the S&P 500. Comparatively, ACV Auctions has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500.

Profitability

This table compares Rightscorp and ACV Auctions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rightscorp	-60.00%	N/A	N/A
ACV Auctions	-14.53%	-13.20%	-6.17%

Summary

ACV Auctions beats Rightscorp on 7 of the 11 factors compared between the two stocks.

About Rightscorp

Rightscorp, Inc. operates as a technology company that has a patent-pending proprietary method for collecting payments from illegal downloaders of copyrighted content through notifications sent to their Internet service providers (ISP’s). The company’s technology system monitors peer-to-peer file sharing networks and sends through email to ISP’s notifications of copyright infringement by the ISPs’ customers with date, time, copyright title, and other specific technology identifiers worldwide. It primarily serves copyright holders. The company was founded in 2010 and is headquartered in Santa Monica, California.

About ACV Auctions

ACV Auctions Inc. operates a digital marketplace that connects buyers and sellers for the online auction of wholesale vehicles. The company's marketplace platform includes digital marketplace, which connects buyers and sellers by providing online auction, which facilitates real-time transactions of wholesale vehicles; Run List for pre-filtering and pre-screening of vehicles up to 24 hours prior to an auction taking place; ACV transportation service to enable the buyers to see real-time transportation quotes and status reports of the vehicle; ACV capital, a short-term inventory financing services for buyers to purchase vehicles; and Go Green's seller assurance service for against claims related to defects in the vehicle. It also provides remarketing centers, which offers value-added services, such as vehicle reconditioning and storage for dealers and commercial partners. In addition, the company offers data services, including True360 report, which provides cosmetic and structural vehicle assessments integrated into vehicle history reports for dealer to make wholesale and retail transaction decisions on and off the marketplace; ACV market report provides transaction data and condition reports for comparable used vehicles, including pricing data from third-party sources and allows dealers to determine pricing and valuation strategies for used vehicles; and ACV MAX inventory management software enables dealers to manage their inventory and set pricing while turning vehicles. Further, it provides data and technology through inspection, such as condition reports, virtual lift solutions, apex device, and vehicle intelligence platform; and marketplace enablement, comprising MyACV application, private marketplaces, operations automation, live appraisals, and programmatic buying service. ACV Auctions Inc. was incorporated in 2014 and is headquartered in Buffalo, New York.