Wrapping up Q3 earnings, we look at the numbers and key takeaways for the online marketplace stocks, including MercadoLibre (NASDAQ:MELI) 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 13 online marketplace stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was in line.
Luckily, online marketplace stocks have performed well with share prices up 37.7% on average since the latest earnings results.
Weakest Q3: 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 $5.31 billion, up 35.3% year on year. This print exceeded analysts’ expectations by 2.5%. Despite the top-line beat, it was still a mixed quarter for the company. MercadoLibre reported impressive revenue growth. On the other hand, its EBITDA and EPS missed because it ramped up investments in its credit and logistics businesses. Specifically, its higher loan originations in the quarter led to the recognition of bad debt upfront (the expected losses on the loans). The new loan originations came from credit cards and moving up-market to higher-quality customers - these new accounts have lower default risk (credit cards have shorter duration), so they come with lower yields that result in a lower blended NIMAL spread (aka margins).
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $2,123.
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Best Q3: Shutterstock (NYSE:SSTK)
Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE:SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.Shutterstock reported revenues of $250.6 million, up 7.4% year on year, outperforming analysts’ expectations by 5.1%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ number of paid downloads estimates.
Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 1.9% since reporting. It currently trades at $28.95.
eHealth (NASDAQ:EHTH)
Aiming to address a high-stakes and often confusing decision, eHealth (NASDAQ:EHTH) guides consumers through health insurance enrollment and related topics.eHealth reported revenues of $58.41 million, down 9.7% year on year, in line with analysts’ expectations. It was a slower quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly.
eHealth delivered the slowest revenue growth in the group. Interestingly, the stock is up 124% since the results and currently trades at $11.40.
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 $144.5 million, up 163% year on year. This number beat analysts’ expectations by 2.9%. Overall, it was a very strong quarter as it also put up EBITDA guidance for next quarter exceeding analysts’ expectations.
EverQuote delivered the fastest revenue growth among its peers. The stock is up 32.7% since reporting and currently trades at $23.
Teladoc (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 $640.5 million, down 3% year on year. This print topped analysts’ expectations by 1.6%. It was a strong quarter as it also logged revenue guidance for next quarter beating analysts’ expectations and a narrow beat of analysts’ EBITDA estimates.
The company reported 93.9 million users, up 4.1% year on year. The stock is up 57.7% since reporting and currently trades at $13.96.
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This content was originally published on Stock Story
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