As we reflect back on the just completed Q1 online marketplace sector earnings season, we dig into the relative performance of Sea Limited (NYSE:SE) 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 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 6.14% since the previous earnings results, on average.
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 users and slow revenue growth. Looking ahead, management did not provide guidance but said that "as we continue to fine-tune our operations and navigate near-term macro uncertainties, we remain highly confident in the long-term opportunities in our markets and our ability to capture those profitably."
“The first quarter of 2023 was another strong quarter for us,” said Forrest Li, Sea’s Chairman and Group Chief Executive Officer.
The company reported 37.6 million paying users, down 38.8% year on year. The stock is down 38.1% since the results and currently trades at $54.51.
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 a growing number of users and a solid beat of analyst estimates.
MercadoLibre pulled off 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 11.9% since the results and currently trades at $1,130.52.
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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.
The RealReal had the weakest performance against analyst estimates and weakest full year guidance update in the group. The company reported 1.01 million users, up 22.5% year on year. The stock is up 63.6% since the results and currently trades at $2.16.
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 $1.82 billion, up 20.5% year on year, beating analyst expectations by 1.72%. It was a mixed quarter for the company, with a growing number of users but an underwhelming revenue guidance for the next quarter.
The company reported 121.1 million nights booked, up 18.6% year on year. The stock is up 1.98% since the results and currently trades at $129.52.
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%.It was a mixed quarter for the company, with an underwhelming revenue guidance for the next quarter. However, buyer growth was strong and above Consensus, with management seeing "positive trends in our first quarter 2023 buyer data, particularly the return to year-over-year growth in the Etsy marketplace's active buyer base".
The company reported 95.5 million active buyers, up 0.45% year on year. The stock is down 16.5% since the results and currently trades at $82.67.
The author has no position in any of the stocks mentioned