By breaking down physical barriers, consumer internet businesses are reshaping how people shop, connect, learn, and play. This influence cuts both ways though because they have high exposure to the ups and downs of consumer spending, and uncertainty surrounding this factor has capped the industry’s returns - over the past six months, its 7.6% gain has lagged the S&P 500 by 4 percentage points.
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. Keeping that in mind, here are two internet stocks boasting durable advantages and one best left ignored.
One Consumer Internet Stock to Sell:
LendingTree (TREE)
Market Cap: $474.7 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 Hesitant About TREE?
- Estimated sales growth of 7% for the next 12 months implies demand will slow from its three-year trend
- High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum
- Free cash flow margin was stuck in limbo over the last few years
LendingTree is trading at $33.26 per share, or 5.1x forward EV/EBITDA. Read our free research report to see why you should think twice about including TREE in your portfolio.
Two Consumer Internet Stocks to Buy:
Sea (SE)
Market Cap: $70.38 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 Should You Buy SE?
- Has the opportunity to boost monetization through new features and premium offerings as its paying users have grown by 22.7% annually over the last two years
- Strong engagement trends coupled with 12.6% annual growth in its average revenue per user demonstrate its platform’s stickiness with die-hard customers
- Free cash flow margin jumped by 18.4 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Sea’s stock price of $114.80 implies a valuation ratio of 4.8x forward price-to-gross profit. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Reddit (RDDT)
Market Cap: $29.87 billion
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Is RDDT a Top Pick?
- Domestic Daily Active Visitors have increased by an average of 13.2% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Grip over its ecosystem is highlighted by its ability to grow engagement while increasing the average revenue per user by 47.1% annually
- RDDT is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
At $153.68 per share, Reddit trades at 16.8x forward EV/EBITDA. Is now the right 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 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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
