Q3 Earnings Roundup: CarGurus (NASDAQ:CARG) And The Rest Of The Online Marketplace Segment
Looking back on online marketplace stocks' Q3 earnings, we examine this quarter's best and worst performers, including CarGurus (NASDAQ:CARG) 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 11 online marketplace stocks we track reported a slower Q3; on average, revenues beat analyst consensus estimates by 1.8% while next quarter's revenue guidance was 1.7% below consensus. Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but online marketplace stocks held their ground better than others, with the share prices up 4.6% on average since the previous 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 $219.4 million, down 48.5% year on year, topping 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.
"We are pleased to have exceeded our forecasted consolidated adjusted EBITDA guidance range for the quarter," said Jason Trevisan, Chief Executive Officer at CarGurus.
CarGurus delivered the slowest revenue growth of the whole group. The company reported 31,191 users, down 0.3% year on year. The stock is up 23.9% since the results and currently trades at $22.77.
Is now the time to buy CarGurus? 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 achieved 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 22.4% since the results and currently trades at $1,588.99.
Is now the time to buy MercadoLibre? Access our full analysis of the earnings results here, it's free.
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 $572.1 million, down 1.3% year on year, falling short of analyst expectations by 12.1%. It was a weak quarter for the company, with slow revenue growth and a miss of analysts' revenue estimates.
Farfetch had the weakest performance against analyst estimates in the group. The company reported 4.13 million active buyers, up 7.5% year on year. The stock is down 91.2% since the results and currently trades at $0.42.
Read our full analysis of Farfetch's results here.
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, surpassing analyst expectations by 3.1%. It was a weak quarter for the company, with a decline in its user base and slow revenue growth.
The company reported 40.5 million users, down 21.4% year on year. The stock is down 22.1% since the results and currently trades at $35.87.
Read our full, actionable report on Sea here, it's free.
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 8.3% year on year, surpassing analyst expectations by 4.6%. It was a very good quarter for the company, with a decent beat of analysts' revenue estimates but slow topline growth.
The company reported 1.57 million users, up 10.8% year on year. The stock is up 1.4% since the results and currently trades at $10.7.
Read our full, actionable report on LegalZoom here, it's free.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
The author has no position in any of the stocks mentioned
