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The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s take a look at how Etsy (NASDAQ:ETSY) 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 11 online marketplace stocks we track reported a slower Q3; on average, revenues beat analyst consensus estimates by 1.8% while next quarter's revenue guidance was 1.7% below consensus. Inflation (despite slowing) has investors prioritizing near-term cash flows, but online marketplace stocks held their ground better than others, with the share prices up 7.1% on average since the previous earnings results.
Etsy (NASDAQ:ETSY)
Founded by a struggling amateur furniture maker Robert Kalin and his two friends, Etsy (NASDAQ:ETSY) is one of the world’s largest online marketplaces, focusing on handmade or vintage items.
Etsy reported revenues of $636.3 million, up 7% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a narrow beat of analysts' revenue estimates but slow revenue growth.
The stock is up 26.3% since the results and currently trades at $76.76.
Is now the time to buy Etsy? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $3.76 billion, up 39.8% year on year, outperforming analyst expectations by 5.9%. It was a very strong quarter for the company, with impressive growth in its user base and exceptional revenue growth.
MercadoLibre scored the fastest revenue growth among its peers. The company reported 120 million daily active users, up 36.4% year on year. The stock is up 21.2% since the results and currently trades at $1,573.2.
Is now the time to buy MercadoLibre? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Farfetch (NYSE:FTCH)
Inspired by the idea of allowing anyone to buy clothes from landmark boutiques of cities like Paris or Milan without having to leave their couch, Farfetch (NYSE: FTCH) is a global marketplace for luxury fashion, connecting boutiques, brands and consumers.