Looking back on online marketplace stocks’ Q1 earnings, we examine this quarter’s best and worst performers, 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 11.5% 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% since reporting and currently trades at $81.85.
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 a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
eHealth delivered 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 13.8% 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 13.2% since the results and currently trades at $6.34.
Read our full analysis of The RealReal’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 $225.2 million, up 4.3% year on year. This print met analysts’ expectations. Zooming out, it was a satisfactory quarter as it also logged 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 21.8% since reporting and currently trades at $34.05.
Read our full, actionable report on CarGurus here, it’s free.
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 result came in 0.6% below analysts' expectations. Aside from that, it was a mixed quarter as it also produced a solid 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 up 19.1% since reporting and currently trades at $13.48.
Read our full, actionable report on Cars.com 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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