A Look Back at Online Marketplace Stocks' Q3 Earnings: Farfetch (NYSE:FTCH) Vs The Rest Of The Pack
Adam Hejl 2023/01/18 4:15 am EST
As online marketplace stocks’ Q3 earnings season wraps, let's dig into 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 4 online marketplace stocks we track reported a weaker Q3; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 4.17% under consensus. Tech stocks have been hit the hardest as investors start to value profits over growth, but online marketplace stocks held their ground better than others, with the share prices up 10.3% since the previous earnings results, on average.
Weakest Q3: 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 $593.3 million, up 1.85% year on year, missing analyst expectations by 0.53%. It was a weak quarter for the company, with slow revenue growth and a miss of the top line analyst estimates.
José Neves, Farfetch Founder, Chairman and CEO, said: “Luxury is an incredible industry that has proven to be resilient, and Farfetch’s global platform for luxury is on pace to broadly double its size over three years, despite navigating an unprecedented series of global events. Through it all, our focus has remained on our mission to be the global platform for luxury while also taking the opportunity to fundamentally re-structure our organization and streamline our cost base. As a result, Farfetch is further positioned to seize the significant announced milestones and future opportunities ahead, and emerge from this period as an even stronger business set to deliver profitability and free cash flow.”
Farfetch delivered the slowest revenue growth of the whole group. The company reported 3.9 million active buyers, up 8.62% year on year. The stock is down 32.9% since the results and currently trades at $6.13.
Read our full report on Farfetch here, it's free.
Best Q3: Etsy (NASDAQ:ETSY)
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 $594.4 million, up 11.6% year on year, beating analyst expectations by 5.4%. It was a mixed quarter for the company, with a solid beat of analyst estimates but slow revenue growth.
Etsy achieved the strongest analyst estimates beat among its peers. The company reported 94.1 million active buyers, up 5.31% year on year. The stock is up 51.1% since the results and currently trades at $132.28.
Is now the time to buy Etsy? Access our full analysis of the earnings results here, it's free.
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 $142.7 million, up 20% year on year, missing analyst expectations by 4.35%. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.
The RealReal had the weakest performance against analyst estimates in the group. The company reported 950 thousand paying users, up 23% year on year. The stock is up 30.6% since the results and currently trades at $1.60.
Read our full analysis of The RealReal's results here.
Airbnb (NASDAQ:ABNB)
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 $2.88 billion, up 28.9% year on year, beating analyst expectations by 1.26%. It was a mixed quarter for the company, with growing number of users but an underwhelming revenue guidance for the next quarter.
Airbnb achieved the fastest revenue growth among the peers. The company reported 99.7 million nights booked, up 25% year on year. The stock is down 8.53% since the results and currently trades at $99.74.
Read our full, actionable report on Airbnb here, it's free.
The author has no position in any of the stocks mentioned