Unpacking Q2 Earnings: CarGurus (NASDAQ:CARG) In The Context Of Other Online Marketplace Stocks
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at online marketplace stocks, 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 16 online marketplace stocks we track reported a decent Q2. As a group, revenues beat analysts’ consensus estimates by 4.9% while next quarter’s revenue guidance was 5.1% above.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. However, online marketplace stocks have held steady amidst all this with share prices up 2.7% on average since the latest 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 $218.7 million, down 8.8% year on year. This print exceeded analysts’ expectations by 1.4%. Despite the top-line beat, it was still a mixed quarter for the company with in-line revenue guidance for the next quarter but slow revenue growth.
“Our Marketplace business continued to accelerate, achieving the largest quarterly revenue increase since 2021, driven by higher adoption of add-on products, continued migration toward premium subscription tiers, and expansion in our global paying dealer base,” said Jason Trevisan, Chief Executive Officer at CarGurus.
CarGurus delivered the slowest revenue growth of the whole group. The company reported 31,352 users, up 0.8% year on year. Interestingly, the stock is up 29.4% since reporting and currently trades at $28.99.
Is now the time to buy CarGurus? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $117.1 million, up 72.3% year on year, outperforming analysts’ expectations by 13.9%. It was an incredible quarter for the company with optimistic revenue guidance for the next quarter and exceptional revenue growth.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.9% since reporting. It currently trades at $23.30.
Is now the time to buy EverQuote? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $642.4 million, down 1.5% year on year, falling short of analysts’ expectations by 1.1%. It was a weak quarter for the company with slow revenue growth.
As expected, the stock is down 24.3% since the results and currently trades at $7.15.
Read our full analysis of Teladoc’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 $178.9 million, up 6.4% year on year, falling short of analysts’ expectations by 1.6%. Taking a step back, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and slow revenue growth.
Cars.com had the weakest performance against analyst estimates among its peers. The company reported 19,390 active buyers, up 3.2% year on year. The stock is flat since reporting and currently trades at $17.84.
Read our full, actionable report on Cars.com here, it’s free.
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 $2.57 billion, up 1.3% year on year, surpassing analysts’ expectations by 1.8%. Overall, it was a weaker quarter for the company with slow revenue growth and underwhelming revenue guidance for the next quarter.
The stock is up 5.8% since reporting and currently trades at $58.80.
Read our full, actionable report on eBay here, it’s free.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
