Q3 Earnings Outperformers: Sea (NYSE:SE) And The Rest Of The Online Marketplace Stocks
As online marketplace stocks’ Q3 earnings season wraps, let's dig into this quarter's best and worst performers, including Sea (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 that feed back into further customer acquisition.
The 10 online marketplace stocks we track reported a slower Q3; on average, revenues beat analyst consensus estimates by 3.2% while next quarter's revenue guidance was 1.7% below consensus. Stocks have faced challenges as investors prioritize near-term cash flows, but online marketplace stocks held their ground better than others, with the share prices up 19.1% on average since the previous earnings results.
Sea (NYSE:SE)
Founded in 2009 and a publicly traded company since 2017, Sea (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 $3.31 billion, up 4.9% year on year, topping analyst expectations by 3.1%. It was a weak quarter for the company, with a decline in its user base and slow revenue growth.
“Our strategy for e-commerce is driven by the principle that maximizing the long-term profitability of the business will generate the greatest returns to our shareholders in the long run,” said Forrest Li, Sea’s Chairman and Group Chief Executive Officer.
The stock is down 18.7% since the results and currently trades at $37.42.
Is now the time to buy Sea? Access our full analysis of the earnings results here, it's free.
Best Q3: MercadoLibre (NASDAQ:MELI)
Originally started as an online auction platform, MercadoLibre (NASDAQ:MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
MercadoLibre reported revenues of $3.76 billion, up 39.8% year on year, outperforming analyst expectations by 5.9%. It was a very strong quarter for the company, with impressive growth in its user base and exceptional revenue growth.
MercadoLibre scored the fastest revenue growth among its peers. The company reported 120 million daily active users, up 36.4% year on year. The stock is up 35.5% since the results and currently trades at $1,758.72.
Is now the time to buy MercadoLibre? Access our full analysis of the earnings results here, it's free.
Weakest Q3: 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 $660.2 million, up 8% year on year, falling short of analyst expectations by 0.4%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and full-year revenue.
Teladoc had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The company reported 90.2 million users, up 9.9% year on year. The stock is up 16.7% since the results and currently trades at $21.14.
Read our full analysis of Teladoc's results here.
LegalZoom (NASDAQ:LZ)
LegalZoom (NASDAQ:LZ) is an online platform that provides online legal services to individuals and small businesses. The company’s co-founders found it difficult and expensive to find lawyers and file paperwork when trying to start a business so they started LegalZoom instead to address this pain point.
LegalZoom reported revenues of $167.3 million, up 7.7% year on year, surpassing analyst expectations by 4.6%. It was a good quarter for the company, with a decent beat of analysts' revenue estimates but slow revenue growth.
The company reported 1.57 million users, up 10.8% year on year. The stock is up 6.5% since the results and currently trades at $11.24.
Read our full, actionable report on LegalZoom here, it's free.
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 $219.4 million, down 48.5% year on year, surpassing analyst expectations by 1.6%. It was a mixed quarter for the company, with revenue exceeding expectations. Adjusted EBITDA and EPS beat by a more meaningful amount. On the other hand, its revenue growth regrettably slowed and its revenue guidance for next quarter and the full year missed Wall Street's estimates. However, adjusted EBITDA guidance for next quarter and the full year were ahead of expectations.
CarGurus had the slowest revenue growth among its peers. The company reported 31,191 users, down 0.3% year on year. The stock is up 30.5% since the results and currently trades at $23.99.
Read our full, actionable report on CarGurus here, it's free.
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The author has no position in any of the stocks mentioned
