By breaking down physical barriers, consumer internet businesses are reshaping how people shop, connect, learn, and play. These themes have enabled rapid growth for the industry, which has posted a 36.9% gain over the past six months compared to 25.9% for the S&P 500.
Nevertheless, investors should tread carefully as many internet companies pursue winner-take-all strategies, meaning losses can be hefty if their playbooks don’t pan out. Taking that into account, here are three internet stocks boasting durable advantages.
Carvana (CVNA)
Market Cap: $47.6 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 Do We Watch CVNA?
- Retail Units Sold are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 40.5% annually, topping its revenue gains
- Free cash flow margin expanded by 22 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
Carvana’s stock price of $334.88 implies a valuation ratio of 19.4x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Airbnb (ABNB)
Market Cap: $75.24 billion
Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ: ABNB) is the world’s largest online marketplace for lodging, primarily homestays.
Why Is ABNB a Good Business?
- Nights and Experiences Booked have grown by 10% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Robust free cash flow margin of 38.9% gives it many options for capital deployment
Airbnb is trading at $125.85 per share, or 17.6x forward EV/EBITDA. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
Instacart (CART)
Market Cap: $10.27 billion
Powering more than one billion grocery orders since its founding, Instacart (NASDAQ: CART) is an online grocery shopping and delivery platform that partners with retailers to help customers shop from local stores through its app or website.
Why Are We Backing CART?
- Remarkable 19.5% revenue growth over the last three years demonstrates its ability to capture significant market share
- Additional sales over the last three years increased its profitability as the 40.5% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 23.9 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $38.55 per share, Instacart trades at 9.8x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
