Wrapping up Q1 earnings, we look at the numbers and key takeaways for the online marketplace stocks, including eBay (NASDAQ:EBAY) 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 13 online marketplace stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.
Luckily, online marketplace stocks have performed well with share prices up 10.1% on average since the latest earnings results.
eBay (NASDAQ:EBAY)
Originally known as the first online auction site, eBay (NASDAQ:EBAY) is one of the world’s largest online marketplaces.
eBay reported revenues of $2.59 billion, up 1.1% year on year. This print exceeded analysts’ expectations by 1.6%. Despite the top-line beat, it was still a slower quarter for the company with revenue guidance for next quarter slightly missing analysts’ expectations and number of active buyers in line with analysts’ estimates.
"eBay's first quarter results were ahead of expectations, as we delivered our fourth consecutive quarter of positive GMV growth," said Jamie Iannone, Chief Executive Officer at eBay.
Interestingly, the stock is up 20.3% since reporting and currently trades at $82.
Read our full report on eBay here, it’s free.
Best Q1: eHealth (NASDAQ:EHTH)
Aiming to address a high-stakes and often confusing decision, eHealth (NASDAQ:EHTH) guides consumers through health insurance enrollment and related topics.
eHealth reported revenues of $113.1 million, up 21.7% year on year, outperforming analysts’ expectations by 13.4%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
eHealth pulled off the biggest analyst estimates beat among its peers. On a dimmer note, the company reported 1.16 million users, down 1.8% year on year. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 13.9% since reporting. It currently trades at $4.03.
Is now the time to buy eHealth? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $160 million, up 11.3% year on year, in line with analysts’ expectations. It was a slower quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and EBITDA guidance for next quarter missing analysts’ expectations significantly.
The RealReal delivered the weakest full-year guidance update in the group. The company reported 985,000 users, up 157% year on year. As expected, the stock is down 10.5% since the results and currently trades at $6.53.
Read our full analysis of The RealReal’s results here.
LegalZoom (NASDAQ:LZ)
Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ:LZ) offers online legal services and documentation assistance for individuals and businesses.
LegalZoom reported revenues of $183.1 million, up 5.1% year on year. This print surpassed analysts’ expectations by 3.4%. It was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ number of subscription units estimates.
The company reported 1.92 million users, up 19.9% year on year. The stock is up 24.3% since reporting and currently trades at $9.03.
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 $225.2 million, up 4.3% year on year. This result met analysts’ expectations. More broadly, it was a satisfactory quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations but revenue guidance for next quarter meeting analysts’ expectations.
The company reported 32,372 users, up 3.8% year on year. The stock is up 19% since reporting and currently trades at $33.25.
Read our full, actionable report on CarGurus here, it’s free.
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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