Whether it be online shopping or social media, secular forces are propelling consumer internet businesses forward. Despite the tailwinds, their demand largely hinges on consumer spending habits, which investors believe are weakening. As a result, the industry has pulled back by 31.3% over the past six months. This drop was especially disheartening since the S&P 500 held steady.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Taking that into account, here is one internet stock poised to generate sustainable market-beating returns and two best left ignored.
Two Consumer Internet Stocks to Sell:
Coursera (COUR)
Market Cap: $982.3 million
Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Why Are We Hesitant About COUR?
- Decision to emphasize platform growth over monetization has contributed to 8.1% annual declines in its average revenue per customer
- Estimated sales growth of 7.3% for the next 12 months implies demand will slow from its three-year trend
- Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
At $5.97 per share, Coursera trades at 3x forward EV/EBITDA. Read our free research report to see why you should think twice about including COUR in your portfolio.
LendingTree (TREE)
Market Cap: $560.1 million
Using the same comparison model that revolutionized travel booking, LendingTree (NASDAQ: TREE) operates an online platform that connects consumers with financial service providers across mortgages, personal loans, credit cards, insurance, and other financial products.
Why Are We Cautious About TREE?
- Lackluster 4.3% annual revenue growth over the last three years indicates the company is losing ground to competitors
- Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas
LendingTree is trading at $40.59 per share, or 5.7x forward EV/EBITDA. Check out our free in-depth research report to learn more about why TREE doesn’t pass our bar.
One Consumer Internet Stock to Buy:
Meta (META)
Market Cap: $1.50 trillion
Famously founded by Mark Zuckerberg in his Harvard dorm, Meta Platforms (NASDAQ: META) operates a collection of the largest social networks in the world - Facebook, Instagram, WhatsApp, and Messenger, along with its metaverse focused Reality Labs.
Why Is META a Good Business?
- 29.9% annual increases in its average revenue per user over the last two years show its platform is resonating with power users
- Share buybacks catapulted its annual earnings per share growth to 51.3%, which outperformed its revenue gains over the last three years
- Strong free cash flow margin of 26.2% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety
Meta’s stock price of $597.72 implies a valuation ratio of 11x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
