Whether it be online shopping or social media, secular forces are propelling consumer internet businesses forward. 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 11.6% gain has lagged the S&P 500 by 4.7 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. On that note, here are three internet stocks we think can generate sustainable market-beating returns.
Uber (UBER)
Market Cap: $144 billion
Notoriously funded with $7.7 billion from the Softbank Vision Fund, Uber (NYSE: UBER) operates a platform of on-demand services such as ride-hailing, food delivery, and freight.
Why Will UBER Outperform?
- Has the opportunity to boost monetization through new features and premium offerings as its monthly active platform consumers have grown by 15.6% annually over the last two years
- Share buybacks catapulted its annual earnings per share growth to 41%, which outperformed its revenue gains over the last three years
- Free cash flow margin jumped by 13.3 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $70.60 per share, Uber trades at 12x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Coursera (COUR)
Market Cap: $1.33 billion
Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Why Could COUR Be a Winner?
- Annual revenue growth of 15.1% over the last three years beat the sector average and underscores the popularity of its platform
- Projected revenue growth of 68% for the next 12 months is above its three-year trend, pointing to accelerating demand
- Additional sales over the last three years increased its profitability as the 68% annual growth in its earnings per share outpaced its revenue
Coursera is trading at $5.11 per share, or 0.9x forward EV/EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
CarGurus (CARG)
Market Cap: $2.96 billion
Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ: CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.
Why Are We Positive on CARG?
- Platform is difficult to replicate at scale and results in a best-in-class gross margin of 90.1%
- Earnings growth has trumped its peers over the last three years as its EPS has compounded at 35.5% annually
- Strong free cash flow margin of 28.6% enables it to reinvest or return capital consistently, and its improved cash conversion implies it’s becoming a less capital-intensive business
CarGurus’s stock price of $33.21 implies a valuation ratio of 8.6x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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.
