Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Cars.com (NYSE: CARS) and the best and worst performers in the online marketplace industry.
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 14 online marketplace stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.7% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 8.1% on average since the latest earnings results.
Cars.com (NYSE: CARS)
Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE: CARS) is a digital marketplace that connects new and used car buyers and sellers.
Cars.com reported revenues of $178.7 million, flat year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ EBITDA estimates.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $13.26.
Read our full report on Cars.com here, it’s free.
Best Q2: Shutterstock (NYSE: SSTK)
Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE: SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.
Shutterstock reported revenues of $267 million, up 21.3% year on year, outperforming analysts’ expectations by 7.5%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA and paid downloads estimates.
The market seems content with the results as the stock is up 4.3% since reporting. It currently trades at $20.67.
Is now the time to buy Shutterstock? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $193.7 million, up 20.6% year on year, falling short of analysts’ expectations by 1.2%. It was a softer quarter as it posted a significant miss of analysts’ number of marketplace units estimates and EBITDA guidance for next quarter missing analysts’ expectations significantly.
ACV Auctions delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. The company reported 210,429 units sold, up 12.8% year on year. As expected, the stock is down 12.5% since the results and currently trades at $11.67.
Read our full analysis of ACV Auctions’s results here.
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 $234 million, up 7% year on year. This print beat analysts’ expectations by 0.7%. Zooming out, it was a satisfactory quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations but revenue guidance for next quarter missing analysts’ expectations significantly.
The company reported 33,095 users, up 5.6% year on year. The stock is up 8.2% since reporting and currently trades at $34.
Read our full, actionable report on CarGurus here, it’s free.
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 $2.73 billion, up 6.1% year on year. This number surpassed analysts’ expectations by 3.1%. Aside from that, it was a mixed quarter as it also logged a solid beat of analysts’ EBITDA estimates but a slight miss of analysts’ number of active buyers estimates.
The company reported 134 million active buyers, up 1.5% year on year. The stock is up 19.8% since reporting and currently trades at $92.75.
Read our full, actionable report on eBay 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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