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Q1 Rundown: CarGurus (NASDAQ:CARG) Vs Other Online Marketplace Stocks


Jabin Bastian /
2024/06/27 5:03 am EDT

Let's dig into the relative performance of CarGurus (NASDAQ:CARG) and its peers as we unravel the now-completed Q1 online marketplace earnings season.

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 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 while some of the online marketplace stocks have fared somewhat better than others, they collectively declined, with share prices falling 2.7% on average since the previous earnings results.

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.

“We are pleased with our first quarter results, as we achieved sustained marketplace revenue acceleration, driven by double-digit QARSD growth and an increase in the number of paying dealers,” said Jason Trevisan, Chief Executive Officer at CarGurus.

CarGurus Total Revenue

The stock is up 14.6% since the results and currently trades at $25.53.

Is now the time to buy CarGurus? Access our full analysis of the earnings results here, it's free.

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.

MercadoLibre Total Revenue

The stock is up 11.3% since the results and currently trades at $1,677.13.

Is now the time to buy MercadoLibre? Access our full analysis of the earnings results here, it's free.

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, falling short of analysts' expectations by 0.7%. 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 in the group. The company reported 1.61 million users, up 6.9% year on year. The stock is down 30.7% since the results and currently trades at $8.46.

Read our full analysis of LegalZoom's results here.

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 $143.8 million, up 1.3% year on year, surpassing analysts' expectations by 3.3%. It was a weaker quarter for the company, with a decline in its users and slow revenue growth.

The company reported 922,000 users, down 9.1% year on year. The stock is down 15.2% since the results and currently trades at $3.2.

Read our full, actionable report on The RealReal here, it's free.

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 $92.96 million, up 26.1% year on year, surpassing analysts' expectations by 15.3%. It was an ok quarter for the company, with solid revenue growth but a decline in its users.

eHealth scored the biggest analyst estimates beat among its peers. The company reported 1.18 billion users, down 4.7% year on year. The stock is up 1.9% since the results and currently trades at $4.88.

Read our full, actionable report on eHealth here, it's free.

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