Stock markets had gotten beaten down badly in February, but Friday brought some relief to those who'd seen their portfolios take big hits. Many uncertainties remain, but investors took a more optimistic view of how things are likely to turn out in the long run, and that led to sizable gains across the market. As of 2:30 p.m. ET, the Dow Jones Industrial Average (^DJI 0.26%) was up 771 points to 33,995. The S&P 500 (^GSPC 0.61%) gained 83 points to 4,371, and the Nasdaq Composite (^IXIC 0.93%) rose 142 points to 13,615.
A couple of stocks showed truly outsized gains that stood out even on a strong market day. CarGurus (CARG 0.32%) kept rising as the strength of the automotive market continued, while Farfetch (FTCH +0.00%) mounted a nice rebound as shareholders had more confidence in the online fashion specialist's business prospects. They're in different industries, but what they have in common is strong financial performance that lifted their shares today. You'll find the details below.
CarGurus drives forward
Shares of CarGurus soared 44% in Friday afternoon trading. The online auto marketplace saw great success from its having pivoted away from a pure listings-based business toward directly enabling transactions, and that success showed up in its fourth-quarter financial results.
Image source: Getty Images.
CarGurus saw massive growth. Revenue of $339 million was up 124% year over year. That closed a year of 73% top-line gains, and CarGurus also saw big improvements in operating income and adjusted net income. Adjusted earnings of $0.43 per share for the quarter were better than expected and topped last year's $0.32 per share.
Interestingly, CarGurus got its growth even without boosting the size of its dealer-client network. Total paying dealers were unchanged at about 30,600 as of the end of 2021. Moreover, website traffic metrics were actually a little weak, with U.S. unique users falling 15% and average monthly sessions down 10% from year-ago levels.
Guidance from CarGurus was also encouraging, with the auto specialist expecting revenue of $390 million to $410 million and adjusted earnings of $0.31 to $0.33 per share. With activity in the auto industry still strong because of supply chain issues, CarGurus is making the most of a great environment.
Farfetch looks classy
Farfetch shares were also sharply higher, rising 38% Friday afternoon. The online fashion specialist posted record results that reassured investors of its long-term promise.
OTC: FTCH
Key Data Points
Farfetch's fourth-quarter results closed a great year. Gross merchandise value (GMV) over the Farfetch platform was up 22% in the quarter compared to the previous year's period, helping 2021 sales rise 33% year over year. Quarterly revenue was up 23%, and Farfetch managed to break even on an adjusted basis, improving from a modest loss in the prior year's fourth quarter.
Fundamentally, Farfetch kept making progress. Active consumers rose by nearly 650,000 to 3.69 million, and average order values moved slightly higher year over year. Farfetch's take rate on its digital platform remained extremely healthy, topping 30%.
Farfetch sees 2022 looking encouraging, with GMV expected to rise 28% to 32%. To be clear, the company is still watching potential obstacles closely, including the COVID-19 pandemic's impact on operations, shipments, and fulfillment efforts. Moreover, any weakness in consumer sentiment could adversely affect the luxury goods business. Nevertheless, shareholders appear to be optimistic about Farfetch's prospects, and that bodes well for a stock that had lost 80% of its value recently.
