The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how online marketplace stocks fared in Q2, starting with Etsy (NASDAQ: ETSY).
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.
Luckily, online marketplace stocks have performed well with share prices up 13.4% on average since the latest earnings results.
Etsy (NASDAQ: ETSY)
Founded by a struggling amateur furniture maker Robert Kalin and his two friends, Etsy (NASDAQ: ETSY) is one of the world’s largest online marketplaces, focusing on handmade or vintage items.
Etsy reported revenues of $672.7 million, up 3.8% year on year. This print exceeded analysts’ expectations by 4.3%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but a slight miss of analysts’ number of active buyers estimates.
"We are encouraged by our second quarter performance, which reflects tangible progress in our key investment areas," said Josh Silverman,
Interestingly, the stock is up 4.2% since reporting and currently trades at $62.76.
Read our full report on Etsy 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 a solid beat of analysts’ EBITDA and paid downloads estimates.
The market seems happy with the results as the stock is up 5.7% since reporting. It currently trades at $20.93.
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 22.6% since the results and currently trades at $10.33.
Read our full analysis of ACV Auctions’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 $192.5 million, up 8.5% year on year. This result topped analysts’ expectations by 5.4%. Zooming out, it was a satisfactory quarter as it also produced strong growth in its users but a slight miss of analysts’ EBITDA estimates.
The company reported 1.96 million users, up 21.5% year on year. The stock is up 27.9% since reporting and currently trades at $10.72.
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 $234 million, up 7% year on year. This number surpassed analysts’ expectations by 0.7%. Taking a step back, it was a satisfactory quarter as it also logged EBITDA guidance for next quarter exceeding analysts’ expectations but revenue guidance for next quarter missing analysts’ expectations.
The company reported 33,095 users, up 5.6% year on year. The stock is up 18.8% since reporting and currently trades at $37.32.
Read our full, actionable report on CarGurus here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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