As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at online marketplace stocks, starting with Sea (NYNYSE:SE:SE).
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 an ok Q1; on average, revenues beat analyst consensus estimates by 5.2%. while next quarter's revenue guidance was 2.4% above consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and online marketplace stocks have held roughly steady amidst all this, with share prices up 0.2% on average since the previous earnings results.
Sea (NYSE:SE) Founded in 2009 and a publicly traded company since 2017, Sea (NYSE:SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
Sea reported revenues of $3.79 billion, up 27.8% year on year, exceeding analysts' expectations by 4.5%. Overall, it was a very good quarter for the company with impressive growth in its users and strong top-line growth.
“I am pleased to share that we are kicking off 2024 with a strong quarter. All our three businesses have delivered strong growth with an improved profit profile,” said Forrest Li, Sea’s Chairman and Chief Executive Officer.
The stock is up 2.2% since reporting and currently trades at $65.90.
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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 with exceptional revenue growth.
The market seems happy with the results as the stock is up 9.8% since reporting. It currently trades at $1,655.
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, in line with analysts' expectations. It was a weak quarter for the company with slow revenue growth and underwhelming revenue guidance for the next quarter.
Interestingly, the stock is up 11.6% since the results and currently trades at $24.85.
LegalZoom (NASDAQ:LZ) LegalZoom (NASDAQ:LZ) is an online platform that provides online legal services to individuals and small businesses. The company’s co-founders found it difficult and expensive to find lawyers and file paperwork when trying to start a business so they started LegalZoom instead to address this pain point.
LegalZoom reported revenues of $174.2 million, up 5% year on year, in line with analysts' expectations. Taking a step back, it was a weak quarter for the company with slow revenue growth and full-year revenue guidance missing analysts' expectations.
LegalZoom had the weakest full-year guidance update among its peers. The company reported 1.61 million users, up 6.9% year on year. The stock is down 44.4% since reporting and currently trades at $6.78.
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 $2.56 billion, up 1.8% year on year, in line with analysts' expectations. Overall, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and slow revenue growth.
The stock is up 6.8% since reporting and currently trades at $54.52.
This content was originally published on Stock Story
