Reviewing ACV Auctions (NASDAQ:ACVA) and First Advantage (NYSE:FA)

First Advantage (NYSE:FA) and ACV Auctions (NASDAQ:ACVA) are both mid-cap business services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Insider and Institutional Ownership

94.9% of First Advantage shares are owned by institutional investors. Comparatively, 88.6% of ACV Auctions shares are owned by institutional investors. 5.3% of First Advantage shares are owned by company insiders. Comparatively, 2.9% 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 & Earnings

This table compares First Advantage and ACV Auctions”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Advantage	$1.05 billion	2.96	$37.29 million	($0.91)	-19.62
ACV Auctions	$674.16 million	3.89	-$79.70 million	($0.45)	-34.11

First Advantage has higher revenue and earnings than ACV Auctions. ACV Auctions is trading at a lower price-to-earnings ratio than First Advantage, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

First Advantage has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, ACV Auctions has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for First Advantage and ACV Auctions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Advantage	0	5	3	0	2.38
ACV Auctions	0	2	9	0	2.82

First Advantage currently has a consensus target price of $66.00, suggesting a potential upside of 269.75%. ACV Auctions has a consensus target price of $22.05, suggesting a potential upside of 43.62%. Given First Advantage’s higher possible upside, analysts plainly believe First Advantage is more favorable than ACV Auctions.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Advantage	0.65%	13.16%	7.33%
ACV Auctions	-12.51%	-12.94%	-5.75%

Summary

First Advantage beats ACV Auctions on 9 of the 14 factors compared between the two stocks.

About First Advantage

First Advantage Corporation provides employment background screening, identity, and verification solutions worldwide. It offers pre-onboarding products and solutions, such as criminal background checks, drug/health screening, extended workforce screening, FBI channeling, identity checks and biometric fraud mitigation tools, education/work history verification, driver records and compliance, healthcare credentials, executive screening, and other screening products. The company also provides post-onboarding solutions, including criminal records monitoring, healthcare sanctions, motor vehicle records, social media screening, and global sanctions and licenses; and other products comprising fleet/vehicle compliance, hiring tax credits and incentives, resident/tenant screening, and investigative research. Its products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security in global enterprises, mid-sized, and small companies. The company was formerly known as Fastball Intermediate, Inc. and changed its name to First Advantage Corporation in March 2021. First Advantage Corporation was founded in 2002 and is based in Atlanta, Georgia.

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.