Looking back on online marketplace stocks’ Q2 earnings, we examine this quarter’s best and worst performers, 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 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.

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting 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 7.2% on average 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 $178.9 million, up 6.4% year on year. This print fell short of analysts’ expectations by 1.6%. Overall, it was a softer quarter for the company with underwhelming revenue guidance for the next quarter and slow revenue growth.

"We drove disciplined growth and strong profitability during the second quarter on top of returning to sequential expansion in our dealer customer base," 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 19,390 active buyers, up 3.2% year on year. Unsurprisingly, the stock is down 8.1% since reporting and currently trades at $16.44.

Read our full report on Cars.com 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