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 can be volatile. This has caused uneasiness over the past six months as the industry’s 7.6% return has trailed the S&P 500’s 11.7% gain.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Taking that into account, here is one internet stock poised to generate sustainable market-beating returns and two we would avoid.
Two Consumer Internet Stocks to Sell:
Match Group (MTCH)
Market Cap: $8.76 billion
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ: MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Why Is MTCH Not Exciting?
- Intense competition is diverting traffic from its platform as its payers fell by 4.6% annually
- Key performance metrics have been flashing red recently as its average revenue per user dropped by 3.4% annually while engagement was weak
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
Match Group is trading at $38.02 per share, or 9.8x forward EV/EBITDA. To fully understand why you should be careful with MTCH, check out our full research report (it’s free).
Shutterstock (SSTK)
Market Cap: $229.7 million
Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE: SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.
Why Are We Wary of SSTK?
- Preference for prioritizing user growth over monetization has led to 85.9% annual drops in its average revenue per request
- Projected sales decline of 2.3% for the next 12 months points to a tough demand environment ahead
- Earnings per share fell by 56.4% annually over the last three years while its revenue grew, showing its incremental sales were much less profitable
Shutterstock’s stock price of $6.26 implies a valuation ratio of 0.4x forward price-to-gross profit. Check out our free in-depth research report to learn more about why SSTK doesn’t pass our bar.
One Consumer Internet Stock to Buy:
Carvana (CVNA)
Market Cap: $50.02 billion
Known for its glass tower car vending machines, Carvana (NYSE: CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Why Will CVNA Outperform?
- Has the opportunity to boost monetization through new features and premium offerings as its retail units sold have grown by 37.7% annually over the last two years
- Strong engagement trends coupled with 10.7% annual growth in its average revenue per unit demonstrate its platform’s stickiness with die-hard customers
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 43.6% outpaced its revenue gains
At $69.45 per share, Carvana trades at 16x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
