As Q1 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the online marketplace stocks, including Etsy (NASDAQ:ETSY) 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 which feed back into further customer acquisition.
The 11 online marketplace stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 3.34%, while on average next quarter revenue guidance was 1.51% under consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows, but online marketplace stocks held their ground better than others, with the share prices up 6.99% since the previous earnings results, on average.
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 $640.9 million, up 10.6% year on year, beating analyst expectations by 3.21%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and slow revenue growth.
"We are pleased that Etsy has once again delivered solid top and bottom line performance in the first quarter, maintaining the vast majority of our pandemic gains in the face of stiff macroeconomic headwinds," said Josh Silverman,
The company reported 95.5 million active buyers, up 0.45% year on year. The stock is down 7.62% since the results and currently trades at $91.46.
Is now the time to buy Etsy? 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) today is a one-stop e-commerce marketplace in Latin America.
MercadoLibre reported revenues of $3.04 billion, up 35.1% year on year, beating analyst expectations by 5.22%. It was a very strong quarter for the company, with growing number of users and a solid beat of analyst estimates.
MercadoLibre delivered the fastest revenue growth among its peers. The company reported 101 million daily active users, up 24.7% year on year. The stock is down 3.29% since the results and currently trades at $1,241.37.
Is now the time to buy MercadoLibre? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Sea Limited (NYSE:SE)
Founded in 2009 and a publicly-traded company since 2017, Sea Limited (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 Limited reported revenues of $3.04 billion, up 4.88% year on year, in line with analyst expectations. It was a weak quarter for the company, with a declining number of users and slow revenue growth.
The stock is down 24.5% since the results and currently trades at $66.5.
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 $165.9 million, up 7.6% year on year, beating analyst expectations by 6.94%. It was a "beat and raise" quarter for the company, with a solid beat of analyst estimates. Revenue and adjusted EBITDA guidance for the next quarter surpassed expectations, and the full-year revenue guidance was lifted.
LegalZoom pulled off the highest full year guidance raise among the peers. The company reported 1.5 million paying users, up 10.2% year on year. The stock is up 58% since the results and currently trades at $13.18.
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 $141.9 million, down 3.27% year on year, missing analyst expectations by 0.36%. It was a weak quarter for the company, with underwhelming revenue guidance for the full year and slow revenue growth.
The RealReal had the weakest performance against analyst estimates and weakest full year guidance update among the peers. The company reported 1.01 million paying users, up 22.5% year on year. The stock is up 25.8% since the results and currently trades at $1.66.
The author has no position in any of the stocks mentioned