As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the online marketplace industry, 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 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 7.7% 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 $181.6 million, up 1.1% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a decent beat of analysts’ EBITDA estimates.

Interestingly, the stock is up 9.9% since reporting and currently trades at $11.44.

Is now the time to buy Cars.com? Access our full analysis of the earnings results 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 6% since reporting. It currently trades at $23.76.

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 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 18.5% since the results and currently trades at $6.64.

Read our full analysis of ACV Auctions’s results here.

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 $238.7 million, up 3.2% year on year. This number beat analysts’ expectations by 1.6%. It was a strong quarter as it also recorded EBITDA guidance for next quarter topping analysts’ expectations and a decent beat of analysts’ EBITDA estimates.

The company reported 33,673 users, up 6.3% year on year. The stock is up 2.3% since reporting and currently trades at $33.90.

Read our full, actionable report on CarGurus here, it’s free for active Edge members.

Sea (NYSE: SE)

Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.

Sea reported revenues of $5.99 billion, up 36.5% year on year. This print surpassed analysts’ expectations by 6.1%. Overall, it was a very strong quarter as it also put up impressive growth in its users and a solid beat of analysts’ number of paying users estimates.

Sea pulled off the biggest analyst estimates beat among its peers. The company reported 65.9 million users, up 31.3% year on year. The stock is down 5.4% since reporting and currently trades at $146.69.

Read our full, actionable report on Sea here, it’s free for active Edge members.

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.

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