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 MercadoLibre (NASDAQ: MELI) 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 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.
In light of this news, share prices of the companies have held steady as they are up 3.1% on average since the latest earnings results.
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 $5.94 billion, up 37% year on year. This print exceeded analysts’ expectations by 8.1%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and impressive growth in its users.
The stock is up 8% since reporting and currently trades at $2,453.
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 9.9% since reporting. It currently trades at $4.21.
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.
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 29.2% since the results and currently trades at $5.17.
Read our full analysis of The RealReal’s results here.
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 $179 million, flat year on year. This print lagged analysts' expectations by 0.6%. Taking a step back, it was a mixed quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but disappointing growth in its buyers.
The company reported 19,250 active buyers, down 0.7% year on year. The stock is down 7.5% since reporting and currently trades at $10.47.
Read our full, actionable report on Cars.com here, it’s free.
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 $242.6 million, up 13.2% year on year. This number missed analysts’ expectations by 4.1%. Aside from that, it was a mixed quarter as it also logged a solid beat of analysts’ number of paid downloads estimates but a miss of analysts’ EBITDA estimates.
Shutterstock had the weakest performance against analyst estimates among its peers. The company reported 120.9 million service requests, up 245% year on year. The stock is up 11.4% since reporting and currently trades at $18.35.
Read our full, actionable report on Shutterstock here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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