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 17.9%. This drop is a noticeable divergence from the S&P 500’s 4.8% 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 is one resilient internet stock at the top of our wish list and two that may face trouble.
Two Consumer Internet Stocks to Sell:
Revolve (RVLV)
Market Cap: $1.96 billion
Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve (NASDAQ: RVLV) is a fashion retailer leveraging social media and a community of fashion influencers to drive its merchandising strategy.
Why Do We Think RVLV Will Underperform?
- May need to improve its platform and marketing strategy as its 5.4% average growth in active customers underwhelmed
- Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas
- Flat earnings per share over the last three years lagged its peers
At $27.22 per share, Revolve trades at 17.3x forward EV/EBITDA. If you’re considering RVLV for your portfolio, see our FREE research report to learn more.
Teladoc (TDOC)
Market Cap: $1.07 billion
Founded to help people in rural areas get online medical consultations, Teladoc Health (NYSE: TDOC) is a telemedicine platform that facilitates remote doctor’s visits.
Why Do We Think Twice About TDOC?
- Annual revenue growth of 1.7% over the last three years was below our standards for the consumer internet sector
- Customer spending has dipped by 8.5% on average as it focused on growing its users
- Projected sales are flat for the next 12 months, implying demand will slow from its three-year trend
Teladoc’s stock price of $5.90 implies a valuation ratio of 4.5x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than TDOC.
One Consumer Internet Stock to Watch:
Take-Two (TTWO)
Market Cap: $40.4 billion
Best known for its Grand Theft Auto and NBA 2K franchises, Take Two (NASDAQ: TTWO) is one of the world’s largest video game publishers.
Why Is TTWO Interesting?
- Market share is on track to rise over the next 12 months as its 28% projected revenue growth implies demand will accelerate from its three-year trend
- Excellent EBITDA margin of 14.9% highlights the efficiency of its business model
- Free cash flow margin jumped by 4.9 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Take-Two is trading at $218.14 per share, or 25.6x forward EV/EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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 meeting near-term momentum — both boxes checked at the same time.
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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.
