The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how CarGurus (NASDAQ:CARG) and the rest of the online marketplace stocks fared in Q3.
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 that feed back into further customer acquisition.
The 13 online marketplace stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.
While some online marketplace stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.9% since the latest earnings results.
CarGurus (NASDAQ:CARG)
Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ:CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.
CarGurus reported revenues of $238.7 million, up 3.2% year on year. This print exceeded analysts’ expectations by 1.6%. Overall, it was a strong quarter for the company with EBITDA guidance for next quarter topping analysts’ expectations and a decent beat of analysts’ EBITDA estimates.
“We delivered another quarter of strong Marketplace revenue growth as dealers have increasingly adopted our data-driven tools,” said Jason Trevisan, Chief Executive Officer at CarGurus.
Interestingly, the stock is up 8.2% since reporting and currently trades at $35.84.
Is now the time to buy CarGurus? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: EverQuote (NASDAQ:EVER)
Aiming to simplify a once complicated process, EverQuote (NASDAQ:EVER) is an online insurance marketplace where consumers can compare and purchase various types of insurance from different providers
EverQuote reported revenues of $173.9 million, up 20.3% year on year, outperforming analysts’ expectations by 4.3%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and revenue guidance for next quarter exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 24.2% since reporting. It currently trades at $27.84.
Is now the time to buy EverQuote? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: ACV Auctions (NYSE:ACVA)
Founded in 2014, ACV Auctions (NASDAQ:ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.
ACV Auctions reported revenues of $199.6 million, up 16.5% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted full-year revenue guidance slightly missing analysts’ expectations and full-year EBITDA guidance missing analysts’ expectations significantly.
ACV Auctions delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. The company reported 218,065 units sold, up 9.9% year on year. The stock is flat since the results and currently trades at $8.16.
Read our full analysis of ACV Auctions’s results here.
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 $626.4 million, down 2.2% year on year. This result was in line with analysts’ expectations. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance beating analysts’ expectations.
The stock is down 7.4% since reporting and currently trades at $7.59.
Read our full, actionable report on Teladoc here, it’s free for active Edge members.
Instacart (NASDAQ:CART)
Powering more than one billion grocery orders since its founding, Instacart (NASDAQ:CART) is an online grocery shopping and delivery platform that partners with retailers to help customers shop from local stores through its app or website.
Instacart reported revenues of $939 million, up 10.2% year on year. This number surpassed analysts’ expectations by 0.5%. It was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and a narrow beat of analysts’ revenue estimates.
The stock is up 20.3% since reporting and currently trades at $44.22.
Read our full, actionable report on Instacart here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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