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Online Marketplace Stocks Q2 In Review: The RealReal (NASDAQ:REAL) Vs Peers

StockStory - Tue Oct 10, 2023

REAL Cover Image

Looking back on online marketplace stocks' Q2 earnings, we examine this quarter's best and worst performers, including The RealReal (NASDAQ:REAL) 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 which feed back into further customer acquisition.

The 11 online marketplace stocks we track reported a weaker Q2; on average, revenues missed analyst consensus estimates by 0.54%, while on average next quarter revenue guidance was 1.72% under consensus. Technology stocks have been hit hard by fears of higher interest rates as investors search for near-term cash flows and online marketplace stocks have not been spared, with share prices down 23.4% since the previous earnings results, on average.

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 $130.9 million, down 15.3% year on year, missing analyst expectations by 0.69%. It was a weak quarter for the company, with declining revenue and underwhelming guidance for the next quarter.

“Our strategic shift to re-focus on the higher margin portion of the consignment business is showing results. In the second quarter of 2023, GMV and revenue exceeded the mid-point of our guidance, and Adjusted EBITDA exceeded the high-end of our guidance range for the quarter,” said John Koryl, Chief Executive Officer of The RealReal.

The RealReal Total Revenue

The RealReal delivered the weakest full year guidance update of the whole group. The company reported 0.99 million users, up 10.8% year on year. The stock is down 24.3% since the results and currently trades at $1.65.

Read our full report on The RealReal here, it's free.

Best Q2: MercadoLibre (NASDAQ:MELI)

Originally started as an online auction platform, MercadoLibre (NASDAQ:MELI) today is a one-stop e-commerce marketplace in Latin America.

MercadoLibre reported revenues of $3.42 billion, up 31.5% year on year, beating analyst expectations by 4.4%. It was a very strong quarter for the company, with impressive growth in its user base and a decent beat of analysts' revenue estimates.

MercadoLibre Total Revenue

MercadoLibre achieved the strongest analyst estimates beat and fastest revenue growth among its peers. The company reported 109 million daily active users, up 29.8% year on year. The stock is up 6.62% since the results and currently trades at $1,242.45.

Is now the time to buy MercadoLibre? Access our full analysis of the earnings results here, it's free.

Weakest Q2: Sea (NYSE:SE)

Founded in 2009 and a publicly-traded company since 2017, Sea Limited (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 $3.1 billion, up 5.2% year on year, missing analyst expectations by 4.68%. It was a weak quarter for the company, with a decline in its user base and a miss of analysts' revenue estimates.

The stock is down 25.4% since the results and currently trades at $42.34.

Read our full analysis of Sea's results here.

Airbnb (NASDAQ:ABNB)

Founded by Joe Gebbia and Brian Chesky by renting out a blowup bed on the floor of their San Francisco apartment, Airbnb (NASDAQ:ABNB) is the world’s largest online marketplace for lodging, primarily homestays.

Airbnb reported revenues of $2.48 billion, up 18.1% year on year, beating analyst expectations by 2.69%. It was a mixed quarter for the company, with Nights and Experiences Booked, a key volume measure for Airbnb, missing expectations, although Gross Bookings was in line with expectations. However, revenue came in ahead of expectations, as did revenue guidance for the next quarter.

The company reported 115.1 million nights booked, up 11% year on year. The stock is down 8.93% since the results and currently trades at $128.3.

Read our full, actionable report on Airbnb here, it's free.

LegalZoom (NASDAQ:LZ)

LegalZoom (NASDAQ:LZ) is an online platform that provides online legal services to individuals and small businesses. The company’s co-founders found it difficult and expensive to find lawyers and file paperwork when trying to start a business so they started LegalZoom instead to address this pain point.

LegalZoom reported revenues of $168.9 million, up 3.04% year on year, beating analyst expectations by 1.1%. It was a mixed quarter for the company, with revenue coming in ahead of Wall Street's expectations, even if just narrowly. On the other hand, its weak revenue growth wasn't great. Also, while next quarter's revenue guidance was in line, adjusted EBITDA guidance was below.

The company reported 1.55 million users, up 11.4% year on year. The stock is down 31.7% since the results and currently trades at $10.49.

Read our full, actionable report on LegalZoom here, it's free.

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The author has no position in any of the stocks mentioned