As the Q3 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 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 32.3% 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 (NYSE:NYT), Cars.com (NYSE:CARS) is a digital marketplace that connects new and used car buyers and sellers.Cars.com reported revenues of $179.7 million, up 3.1% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a slight miss of analysts’ number of dealer customers estimates.
"We demonstrated steady and consistent execution against our platform strategy as we drove profitable growth across the Cars Commerce product suite during the third quarter. Increased subscription growth, particularly in AccuTrade, reflected growing dealer affinity for our unique data insights and differentiated technology. Now, we are focused on finishing the year strong with further revenue and margin growth, and continued product innovation that enables automotive commerce in this strong demand environment, " 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 19,255 active buyers, up 2.9% year on year. Interestingly, the stock is up 3.9% since reporting and currently trades at $17.45.
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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 an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ number of paid downloads estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $29.49.
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, exceeding analysts’ expectations by 2.5%. Still, it was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates.
The stock is down 4.7% since the results and currently trades at $2,021.
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 beat analysts’ expectations by 1.6%. It was a strong quarter as it also recorded 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 41.9% since reporting and currently trades at $12.56.
Etsy (NASDAQ:ETSY)
Founded by a struggling amateur furniture maker Robert Kalin and his two friends, Etsy (NASDAQ:ETSY) is one of the world’s largest online marketplaces, focusing on handmade or vintage items.Etsy reported revenues of $662.4 million, up 4.1% year on year. This number surpassed analysts’ expectations by 1.5%. More broadly, it was a mixed quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but number of active buyers in line with analysts’ estimates.
The company reported 96.71 million active buyers, down 0.7% year on year. The stock is up 10% since reporting and currently trades at $52.80.
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