Wrapping up Q1 earnings, we look at the numbers and key takeaways for the online marketplace stocks, including Sea (NYSE:SE) 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.
Thankfully, share prices of the companies have been resilient as they are up 6.2% on average since the latest earnings results.
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 $4.84 billion, up 27.8% year on year. This print fell short of analysts’ expectations by 1.2%, but it was still a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ number of paying users estimates.
“We have delivered another great quarter of strong growth with improving profitability across all three businesses. Our strong start to the year gives us more confidence of achieving our full-year guidance.” said Forrest Li, Sea’s Chairman and Chief Executive Officer.
Interestingly, the stock is up 16.5% since reporting and currently trades at $166.10.
We think Sea is a good business, but is it a buy today? Read our full report 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 a solid beat of analysts’ EBITDA estimates.
eHealth achieved 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 11.2% since reporting. It currently trades at $4.15.
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 21.8% since the results and currently trades at $5.71.
Read our full analysis of The RealReal’s results here.
EverQuote (NASDAQ:EVER)
Aiming to simplify a once complicated process, EverQuote (NASDAQ:EVER) is an online insurance marketplace where consumers can compare and purchase various types of insurance from different providers
EverQuote reported revenues of $166.6 million, up 83% year on year. This result beat analysts’ expectations by 5.2%. It was an exceptional quarter as it also put up EBITDA guidance for next quarter exceeding analysts’ expectations.
EverQuote achieved the fastest revenue growth among its peers. The stock is down 5.9% since reporting and currently trades at $24.81.
Read our full, actionable report on EverQuote 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 print met analysts’ expectations. Zooming out, it was a satisfactory quarter as it also recorded EBITDA guidance for next quarter exceeding analysts’ expectations.
The company reported 32,372 users, up 3.8% year on year. The stock is up 12.4% since reporting and currently trades at $31.41.
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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