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 Cars.com (NYSE:CARS) 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 1.52% under consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but online marketplace stocks held their ground better than others, with the share prices up 7.78% since the previous earnings results, on average.
Cars.com (NYSE:CARS)
Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE:CARS) is a digital marketplace that connects new and used car buyers and sellers.
Cars.com reported revenues of $167.1 million, up 5.6% year on year, in line with analyst expectations. It was a weaker quarter for the company, with slow revenue growth and declining number of users.
"We drove strong first quarter performance with year-over-year growth in key metrics - revenue, Adjusted EBITDA, and traffic. Our subscription business continues to deliver strong recurring revenue driven by increased product sales and customer retention. Based on our momentum, we are confident in our growth prospects for the second quarter and reaffirm our full-year guidance," said Alex Vetter, Chief Executive Officer of CARS.
The company reported 19.2 thousand dealer customers, down 1.61% year on year. The stock is down 0.05% since the results and currently trades at $19.37.
Read our full report on Cars.com 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 5.81% since the results and currently trades at $1,209.01.
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 declining number of users and slow revenue growth.
The company reported 3.6 million paying users, down 38.8% year on year. The stock is down 34.9% since the results and currently trades at $57.34.
Read our full analysis of Sea Limited's results here.
Farfetch (NYSE:FTCH)
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 $556.4 million, up 8.08% year on year, beating analyst expectations by 7.96%. It was a decent quarter for the company, with an impressive beat of analyst estimates but slow revenue growth.
The company reported 3.99 million active buyers, up 4.45% year on year. The stock is up 40.2% since the results and currently trades at $6.1.
Read our full, actionable report on Farfetch here, it's free.
Teladoc (NYSE:TDOC)
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 users, up 6.79% year on year. The stock is down 2.37% since the results and currently trades at $25.15.
Read our full, actionable report on Teladoc here, it's free.
The author has no position in any of the stocks mentioned