Consumer internet businesses are redefining how people engage with the world by giving them instant connectivity and convenience. This influence cuts both ways though because they have high exposure to the ups and downs of consumer spending, and the market seems to believe the tide is turning in the wrong direction - over the past six months, the industry has tumbled by 19.3%. This performance is a noticeable divergence from the S&P 500’s 7.5% return.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Taking that into account, here are three internet stocks boasting durable advantages.
Snap (SNAP)
Market Cap: $9.26 billion
Founded by Stanford University students Evan Spiegel, Reggie Brown, and Bobby Murphy, and originally called Picaboo, Snapchat (NYSE: SNAP) is an image centric social media network.
Why Are We Bullish on SNAP?
- Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 11.9%, and its rise over the last few years was fueled by some leverage on its fixed costs
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 24.5% over the last three years outstripped its revenue performance
- Free cash flow margin expanded by 8.8 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
Snap’s stock price of $5.54 implies a valuation ratio of 8.2x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Remitly (RELY)
Market Cap: $3.87 billion
With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ: RELY) is an online platform that enables consumers to safely and quickly send money globally.
Why Do We Love RELY?
- Active Customers have grown by 28.4% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 247% annually, topping its revenue gains
- Free cash flow margin increased by 35.2 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $18.60 per share, Remitly trades at 8.6x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
MercadoLibre (MELI)
Market Cap: $83.2 billion
Originally started as an online auction platform, MercadoLibre (NASDAQ: MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Why Will MELI Outperform?
- Customer spending is rising as the company has focused on monetization over the last two years, leading to 77.7% annual growth in its average revenue per user
- Share buybacks catapulted its annual earnings per share growth to 45.9%, which outperformed its revenue gains over the last three years
- MELI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy
MercadoLibre is trading at $1,635 per share, or 18.1x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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.
