As Q2 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 weaker Q2; on average, revenues missed analyst consensus estimates by 0.54%, while on average next quarter revenue guidance was 1.72% under consensus. Tech stocks have been hit the hardest as investors start to value profits over growth and online marketplace stocks have not been spared, with share prices down 21.5% 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 $628.9 million, up 7.48% year on year, beating analyst expectations by 1.86%. It was a weaker quarter for the company, with slow revenue growth and underwhelming revenue guidance for the next quarter.
"The Etsy marketplace's active buyers reached an all-time high in the second quarter, signaling the relevance of our brand and our ability to create opportunities for our sellers. This growth in buyers helped our core marketplace return to year-over-year GMS growth in May and June, and we are pleased to see GMS growth continue into the beginning of the third quarter," said Josh Silverman,
The stock is down 32.3% since the results and currently trades at $65.Is now the time to buy Etsy? Read our full report on Etsy here.
Best Q2: 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 $3.42 billion, up 31.5% year on year, beating analyst expectations by 4.4%. It was a very strong quarter for the company, with impressive growth in its user base and a decent beat of analysts' revenue estimates.
MercadoLibre achieved the strongest analyst estimates beat and fastest revenue growth among its peers. The company reported 109 million daily active users, up 29.8% year on year. The stock is up 8.07% since the results and currently trades at $1,259.41.
Is now the time to buy MercadoLibre? Access our full analysis of the earnings results here, it's free.
Weakest Q2: Sea (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 reported revenues of $3.1 billion, up 5.2% year on year, missing analyst expectations by 4.68%. It was a weak quarter for the company, with a decline in its user base and a miss of analysts' revenue estimates.
The stock is down 23.3% since the results and currently trades at $43.55.
Founded by Joe Gebbia and Brian Chesky by renting out a blowup bed on the floor of their San Francisco apartment, Airbnb (NASDAQ: ABNB) is the world’s largest online marketplace for lodging, primarily homestays.
Airbnb reported revenues of $2.48 billion, up 18.1% year on year, beating analyst expectations by 2.69%. It was a mixed quarter for the company, with Nights and Experiences Booked, a key volume measure for Airbnb, missing expectations, although Gross Bookings was in line with expectations. However, revenue came in ahead of expectations, as did revenue guidance for the next quarter.
The company reported 115.1 million nights booked, up 11% year on year. The stock is down 5.11% since the results and currently trades at $133.68.
Inspired by the idea of allowing anyone to buy clothes from landmark boutiques of cities like Paris or Milan without having to leave their couch, Farfetch (NYSE: FTCH) is a global marketplace for luxury fashion, connecting boutiques, brands and consumers.
Farfetch reported revenues of $572.1 million, down 1.25% year on year, missing analyst expectations by 12.1%. It was a weak quarter for the company, with slow revenue growth and a miss on key metrics such as gross merchandise value (GMV), active consumers, revenue, and adjusted EBITDA. Looking ahead, the company lowered its full year GMV guidance meaningfully and also cut adjusted EBITDA guidance for the same period.
Farfetch had the weakest performance against analyst estimates among the peers. The company reported 4.13 million active buyers, up 7.49% year on year. The stock is down 56.8% since the results and currently trades at $2.06.
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The author has no position in any of the stocks mentioned