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Q2 Rundown: CarGurus (NASDAQ:CARG) Vs Other Online Marketplace Stocks

StockStory - Wed Oct 18, 2023

CARG Cover Image

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 the online marketplace stocks have fared in Q2, starting with CarGurus (NASDAQ:CARG).

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 11 online marketplace stocks we track reported a weaker Q2; on average, revenues missed analyst consensus estimates by 0.54% while next quarter's revenue guidance was 1.72% below consensus. Investors abandoned cash-burning companies since higher interest rates make it harder to raise capital, and online marketplace stocks have not been spared, with share prices down 22.1% on average, since the previous earnings results.

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 $239.7 million, down 53.1% year on year, topping analyst expectations by 4.07%. It was a weak quarter for the company, with slow revenue growth and underwhelming revenue guidance for the next quarter.

"We are extremely pleased with our second quarter results as we exceeded our forecasted consolidated adjusted EBITDA guidance for the quarter," said Jason Trevisan, Chief Executive Officer at CarGurus.

CarGurus Total Revenue

CarGurus delivered the slowest revenue growth of the whole group. The company reported 31.1 thousand users, down 0.15% year on year. The stock is down 11.6% since the results and currently trades at $17.

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

Best Q2: 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 $3.42 billion, up 31.5% year on year, outperforming 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 scored the biggest 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 5.55% since the results and currently trades at $1,230.

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 (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, falling short of 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 18.8% since the results and currently trades at $46.10.

Read our full analysis of Sea'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 $168.2 million, up 3.26% year on year, falling short of analyst expectations by 0.53%. It was a weak quarter for the company, with slow revenue growth and a decline in its user base.

The company reported 18.8k active buyers, down 3.75% year on year. The stock is down 23.6% since the results and currently trades at $17.13.

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

Teladoc (NYSE:TDOC)

Founded to help people in rural areas get online medical consultations, Teladoc Health (NYSE:TDOC) is a telemedicine platform that facilitates remote doctor’s visits.

Teladoc reported revenues of $652.4 million, up 10.1% year on year, in line with analyst expectations. It was a mixed quarter for the company, with slow revenue growth.

The company reported 85.9 million users, up 6.58% year on year. The stock is down 16.6% since the results and currently trades at $19.

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

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The author has no position in any of the stocks mentioned