The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how eBay (NASDAQ:EBAY) and the rest of the online marketplace stocks fared in Q3.
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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.9% 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 $2.82 billion, up 9.5% year on year. This print exceeded analysts’ expectations by 3.2%. 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.
"Q3 was another strong quarter for eBay, reflecting continued momentum across our marketplace and disciplined execution of our strategy," said Jamie Iannone, Chief Executive Officer of eBay.
Unsurprisingly, the stock is down 18.7% since reporting and currently trades at $80.95.
Read our full report on eBay here, it’s free for active Edge members.
Best Q3: 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 $173.9 million, up 20.3% year on year, outperforming analysts’ expectations by 4.3%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and revenue guidance for next quarter exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 10.2% since reporting. It currently trades at $24.70.
Is now the time to buy EverQuote? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: 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 $199.6 million, up 16.5% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted full-year revenue guidance slightly missing analysts’ expectations and full-year EBITDA guidance missing analysts’ expectations significantly.
ACV Auctions delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. The company reported 218,065 units sold, up 9.9% year on year. As expected, the stock is down 12.6% since the results and currently trades at $7.13.
Read our full analysis of ACV Auctions’s results here.
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 $260.1 million, up 3.8% year on year. This result topped analysts’ expectations by 1.6%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ number of paid downloads estimates.
The company reported 111.7 million service requests, down 0.5% year on year. The stock is down 5.2% since reporting and currently trades at $20.59.
Read our full, actionable report on Shutterstock here, it’s free for active Edge members.
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 $181.6 million, up 1.1% year on year. This print met analysts’ expectations. More broadly, it was a mixed quarter as it underperformed in some other aspects of the business.
The company reported 19,526 active buyers, up 1.4% year on year. The stock is up 10.1% since reporting and currently trades at $11.46.
Read our full, actionable report on Cars.com here, it’s free for active Edge members.
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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