Online Marketplace Stocks Q2 Recap: Benchmarking LegalZoom (NASDAQ:LZ)

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 LegalZoom (NASDAQ:LZ) and the rest of the online marketplace stocks fared in Q2.

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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 4.9% while next quarter’s revenue guidance was 5.1% above.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

Thankfully, online marketplace stocks have been resilient with share prices up 8.1% on average since the latest earnings results.

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 $177.4 million, up 5% year on year. This print exceeded analysts’ expectations by 2.6%. Despite the top-line beat, it was still a weaker quarter for the company with slow revenue growth and a miss of analysts’ user estimates.

“I am excited to be taking an active and direct role in executing LegalZoom’s growth strategy,” said Jeff Stibel, Chairman and Chief Executive Officer of LegalZoom.

Interestingly, the stock is up 10.3% since reporting and currently trades at $6.55.

Read our full report on LegalZoom 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%. The business had an incredible quarter 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 12.5% since reporting. It currently trades at $20.99.

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 softer quarter as it posted slow revenue growth.

As expected, the stock is down 10.4% since the results and currently trades at $8.46.

Read our full analysis of Teladoc’s results here.

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 $65.86 million, down 1.4% year on year. This result topped analysts’ expectations by 20.9%. Overall, it was a strong quarter as it also put up full-year revenue guidance beating analysts’ expectations.

eHealth pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 13.4% since reporting and currently trades at $4.06.

Read our full, actionable report on eHealth here, it’s free.

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 $5.07 billion, up 41.5% year on year. This print surpassed analysts’ expectations by 8.3%. It was a stunning quarter as it also put up impressive growth in its users and exceptional revenue growth.

The company reported 156.7 million daily active users, up 43.8% year on year. The stock is up 28.7% since reporting and currently trades at $2,064.

Read our full, actionable report on MercadoLibre here, it’s free.

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