Consumer internet businesses are redefining how people engage with the world by giving them instant connectivity and convenience. 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 3.1% over the past six months. This performance is a noticeable divergence from the S&P 500’s 8.1% return.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Keeping that in mind, here are two internet stocks we think can generate sustainable market-beating returns and one best left ignored.
One consumer internet stock to sell:
Cars.com (CARS)
Market Cap: $550.9 million
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.
Why Does CARS Give Us Pause?
- Increasing competition is redirecting attention to other platforms as it failed to grow its dealer customers over the last two years
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.4%
- Earnings per share have dipped by 15.6% annually over the past three years, which is concerning because stock prices follow EPS over the long term
At $10.28 per share, Cars.com trades at 4.7x forward EV/EBITDA. Read our free research report to see why you should think twice about including CARS in your portfolio.
Two consumer internet stocks to buy:
DoorDash (DASH)
Market Cap: $79.92 billion
Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NASDAQ: DASH) operates an on-demand food delivery platform.
What Makes DASH Stand Out?
- Orders have grown by 23.5% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Highly efficient business model is illustrated by its impressive 20% EBITDA margin, and its rise over the last few years was fueled by some leverage on its fixed costs
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 98.3% outpaced its revenue gains
DoorDash’s stock price of $184.86 implies a valuation ratio of 19.1x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Sea (SE)
Market Cap: $47.74 billion
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.
Why Do We Love SE?
- Paying Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Switching costs of its platform were on full display over the last two years as it not only grew engagement but also increased the average revenue per user by 15.5% annually
- Earnings growth has massively outpaced its peers over the last three years as its EPS has compounded at 25.8% annually
Sea is trading at $78.06 per share, or 3.3x forward price-to-gross profit. Is now a good time to buy? See for yourself 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 meet 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
