Looking back on online marketplace stocks’ Q2 earnings, we examine this quarter’s best and worst performers, 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 16 online marketplace stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 4.9% while next quarter’s revenue guidance was 5.1% above.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Thankfully, online marketplace stocks have been resilient with share prices up 7.2% on average since the latest 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 $178.9 million, up 6.4% year on year. This print fell short of analysts’ expectations by 1.6%. Overall, it was a softer quarter for the company with underwhelming revenue guidance for the next quarter and slow revenue growth.
"We drove disciplined growth and strong profitability during the second quarter on top of returning to sequential expansion in our dealer customer base," said Alex Vetter, Chief Executive Officer of Cars Commerce.
Cars.com delivered the weakest performance against analyst estimates of the whole group. The company reported 19,390 active buyers, up 3.2% year on year. Unsurprisingly, the stock is down 8.1% since reporting and currently trades at $16.44.
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Best Q2: EverQuote (NASDAQ:EVER)
Aiming to simplify a once complicated process, EverQuote (NASDAQ:EVER) is an online insurance marketplace where consumers can compare and purchase various types of insurance from different providersEverQuote reported revenues of $117.1 million, up 72.3% year on year, outperforming analysts’ expectations by 13.9%. The business had an incredible quarter with optimistic revenue guidance for the next quarter and exceptional revenue growth.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 18.1% since reporting. It currently trades at $19.65.
Weakest Q2: 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 $642.4 million, down 1.5% year on year, falling short of analysts’ expectations by 1.1%. It was a softer quarter as it posted slow revenue growth.
As expected, the stock is down 8.9% since the results and currently trades at $8.60.
eBay (NASDAQ:EBAY)
Originally known as the first online auction site, eBay (NASDAQ:EBAY) is one of the world’s largest online marketplaces.eBay reported revenues of $2.57 billion, up 1.3% year on year. This print topped analysts’ expectations by 1.8%. However, it was a weaker quarter as it produced slow revenue growth and underwhelming revenue guidance for the next quarter.
The stock is up 20.7% since reporting and currently trades at $67.09.
The RealReal (NASDAQ:REAL)
Founded by consignment store aficionado Julie Wainwright, The RealReal (NASDAQ: REAL) is an online marketplace for buying and selling secondhand luxury goods.The RealReal reported revenues of $144.9 million, up 10.8% year on year. This result topped analysts’ expectations by 3.6%. Aside from that, it was a weaker quarter as it logged a miss of analysts’ user estimates and slow revenue growth.
The RealReal had the weakest full-year guidance update among its peers. The company reported 381,000 users, up 8.5% year on year. The stock is up 8.1% since reporting and currently trades at $3.34.
This content was originally published on Stock Story
