Wrapping up Q4 earnings, we look at the numbers and key takeaways for the online marketplace stocks, including Cars.com (NYSE:CARS) 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 that feed back into further customer acquisition.
The 13 online marketplace stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 2.1% 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 22.9% since the latest earnings results.
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 $180.4 million, flat year on year. This print fell short of analysts’ expectations by 2.4%. Overall, it was a softer quarter for the company with a slight miss of analysts’ number of dealer customers estimates.
"Our fourth quarter was highlighted by strong OEM and National revenue, which was up 15% year-over-year, and robust Adjusted EBITDA margin of nearly 31%, capping a year of solid growth and consistent profitability improvement. As the automotive industry looks for efficiency, the benefits of leveraging our platform of connected solutions are leading to measurable benefits and meaningful sales impact for our customers," said Alex Vetter, Chief Executive Officer of Cars Commerce.
Cars.com delivered the weakest performance against analyst estimates of the whole group. The company reported 19,206 active buyers, down 1.5% year on year. The stock is down 26.6% since reporting and currently trades at $11.24.
Read our full report on Cars.com here, it’s free.
Best Q4: 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 $6.06 billion, up 37.4% year on year, outperforming analysts’ expectations by 2.8%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ number of unique active users estimates.
The stock is down 12.7% since reporting. It currently trades at $1,850.
Is now the time to buy MercadoLibre? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $640.5 million, down 3% year on year, in line with analysts’ expectations. It was a softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations.
Teladoc delivered the slowest revenue growth in the group. The company reported 93.8 million users, up 4.7% year on year. As expected, the stock is down 32.7% since the results and currently trades at $7.40.
Read our full analysis of Teladoc’s results here.
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 $147.5 million, up 165% year on year. This number topped analysts’ expectations by 10%. Overall, it was an exceptional quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations.
EverQuote pulled off the fastest revenue growth among its peers. The stock is up 5.9% since reporting and currently trades at $21.33.
Read our full, actionable report on EverQuote here, it’s free.
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 $164 million, up 14.4% year on year. This print was in line with analysts’ expectations. However, it was a slower quarter as it produced full-year EBITDA guidance missing analysts’ expectations significantly and a slight miss of analysts’ number of active buyers estimates.
The RealReal delivered the highest full-year guidance raise among its peers. The company reported 408,000 users, up 7.1% year on year. The stock is down 31% since reporting and currently trades at $5.49.
Read our full, actionable report on The RealReal here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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.