Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at The RealReal (NASDAQ:REAL), and the best and worst performers in the online marketplace group.
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. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but online marketplace stocks held their ground better than others, with share prices down 3.69% since the previous earnings results, on average.
Weakest Q1: 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.
“During the first quarter of 2023, we made progress on our financial and operating results. For the quarter, revenue exceeded the mid-point of our guidance, and Adjusted EBITDA exceeded the high-end of our guidance range. We believe our strategy of re-focusing efforts on the higher margin consignment business is starting to deliver results. During the first quarter, consignment revenue grew 22%, and direct revenue declined 49% year-over-year. Additionally, we made progress on minimizing lower-value consigned items. As a result of these actions, we expanded our gross margin in the first quarter, and we were able to deliver a higher take rate, more gross profit dollars, and improved profitability, ” said John Koryl, Chief Executive Officer of The RealReal.
The RealReal delivered the weakest performance against analyst estimates and weakest full year guidance update of the whole group. The company reported 1.01 million paying users, up 22.5% year on year. The stock is up 9.85% since the results and currently trades at $1.45.
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 scored 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 0.05% since the results and currently trades at $1,283.
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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%. Despite the stock rising on the results, it was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and slow revenue growth.
The stock is down 13.3% since the results and currently trades at $85.87.
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 $629.2 million, up 11.3% year on year, beating analyst expectations by 1.78%. It was a mixed quarter for the company, with a decent beat of analyst estimates but slow revenue growth.
The company reported 84.9 million paying users, up 6.79% year on year. The stock is down 11.6% since the results and currently trades at $22.76.
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 strong quarter for the company, with a solid beat of analyst estimates and revenue and EBITDA guidance for the next quarter and full year exceeding analysts' expectations.
LegalZoom scored 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 28.9% since the results and currently trades at $10.75.
The author has no position in any of the stocks mentioned