As the Q1 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers in the online marketplace industry, including Cars.com (NYSE:CARS) and its peers.
Marketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission-paying sellers, generating flywheel scale effects that feed back into further customer acquisition.
The 15 online marketplace stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 4.2%. while next quarter's revenue guidance was 2.4% above consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and while some of the online marketplace stocks have fared somewhat better than others, they collectively declined, with share prices falling 2.6% on average since the previous earnings results.
Cars.com (NYSE:CARS) Originally started as a joint venture between several media companies including The Washington Post (NYSE:POST) and The New York Times, Cars.com (NYSE:CARS) is a digital marketplace that connects new and used car buyers and sellers.
Cars.com reported revenues of $180.2 million, up 7.8% year on year, in line with analysts' expectations. It was a mixed quarter for the company: Its revenue growth regrettably slowed and its EPS missed analysts' estimates. On the bright side, its full-year revenue guidance beat Wall Street's expectations.
"We delivered another strong quarter driven by our progress against the growth drivers underpinning our platform strategy. We believe Dealers and OEMs will increasingly need our industry-leading solutions to connect with in-market shoppers and drive greater efficiency while managing rising inventory levels. As our product adoption continues to grow, we are well-positioned to deliver our full-year guidance," said Alex Vetter, Chief Executive Officer of Cars Commerce.
The stock is up 15.7% since the results and currently trades at $19.75.
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Best Q1: MercadoLibre (NASDAQ:MELI) Originally started as an online auction platform, MercadoLibre (NASDAQ:MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
MercadoLibre reported revenues of $4.33 billion, up 36% year on year, outperforming analysts' expectations by 12.1%. It was a stunning quarter for the company: MercadoLibre blew past analysts' revenue and EPS estimates this quarter, driven by better-than-expected GMV on its e-commerce platform.
The stock is up 11.2% since the results and currently trades at $1,676.25.
Slowest Q1: CarGurus (NASDAQ:CARG) Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ:CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.
CarGurus reported revenues of $215.8 million, down 7% year on year, falling short of analysts' expectations by 0.5%. It was a weak quarter for the company, with slow revenue growth and underwhelming revenue guidance for the next quarter.
The stock is up 16.7% since the results and currently trades at $25.99.
Teladoc (NYSE:NYSE:TDOC) Founded to help people in rural areas get online medical consultations, Teladoc Health (NYSE:TDOC) is a telemedicine platform that facilitates remote doctor’s visits.
Teladoc reported revenues of $646.1 million, up 2.7% year on year, surpassing analysts' expectations by 1.4%. It was a weaker quarter for the company, with slow revenue growth.
The company reported 91.8 million users, up 8.1% year on year. The stock is down 24% since the results and currently trades at $10.13.
Robinhood (NASDAQ:HOOD) With a mission to democratize finance, Robinhood (NASDAQ:HOOD) is an online consumer finance platform known for its commission-free stock and crypto trading.
Robinhood reported revenues of $618 million, up 40.1% year on year, surpassing analysts' expectations by 11.4%. It was a very strong quarter for the company, with exceptional revenue growth.
Robinhood delivered the fastest revenue growth among its peers. The company reported 23.9 million users, up 3.5% year on year. The stock is up 27.4% since the results and currently trades at $22.75.
