Looking back on online marketplace stocks' Q2 earnings, we examine this quarter's best and worst performers, including Farfetch (NYSE:FTCH) 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 multiples have reverted to the historical mean after reaching all time levels in early 2021 and online marketplace stocks have not been spared, with share prices down 19.4% since the previous earnings results, on average.
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 of analysts' revenue estimates.
José Neves, Farfetch Founder, Chairman and CEO, said: “Our Q2 results show Farfetch is growing, becoming more efficient, and executing on our key strategic priorities. We have also taken decisive action to adapt to the macro environment of the last 18 months. 2023 is set up to be a great year for Farfetch, toward strong GMV growth, Adjusted EBITDA profitability and positive free cash flow. All the while we remain steadfast on delivering our strategic vision of becoming the global platform for luxury.”
Farfetch delivered the weakest performance against analyst estimates of the whole group. The company reported 4.13 million active buyers, up 7.49% year on year. The stock is down 58.3% since the results and currently trades at $1.99.Is now the time to buy Farfetch? Read our full report on Farfetch 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 delivered 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 10.6% since the results and currently trades at $1,288.87.
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 22.5% since the results and currently trades at $44.
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 company reported 96.3 million active buyers, up 2.45% year on year. The stock is down 33.5% since the results and currently trades at $63.92.
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 $130.9 million, down 15.3% year on year, missing analyst expectations by 0.69%. It was a weak quarter for the company, with slow revenue growth and underwhelming revenue guidance for the next quarter.
The RealReal had the weakest full year guidance update among the peers. The company reported 0.99 million users, up 10.8% year on year. The stock is up 2.75% since the results and currently trades at $2.24.
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The author has no position in any of the stocks mentioned