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Consumer internet businesses are redefining how people engage with the world by giving them instant connectivity and convenience. These themes have enabled rapid growth for the industry,
\nwhich has posted a 36.5% gain over the past six months compared to 17.5% for the S&P 500. <\/p>\n
However, long-term winners that can stand the test of time are rare in this space because competition is fierce with many well-capitalized companies. Keeping that in mind, here are three internet stocks we\u2019re steering clear of. <\/p>\n
Wayfair (W)<\/p>\n
Market Cap: $11.2 billion<\/p>\n
Founded in 2002 by Niraj Shah, Wayfair (NYSE: W<\/a>) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.<\/p>\n Why Should You Sell W?<\/p>\n Intense competition is diverting traffic from its platform as its active customers fell by 1.7% annuallyDemand has been weak recently as it posted disappointing growth in its average revenue per buyer and struggled to expand its platformGross margin of 30.3% reflects its high servicing costs<\/p>\n Wayfair is trading at $87.72 per share, or 21.2x forward EV\/EBITDA. To fully understand why you should be careful with W, check out our full research report (it\u2019s free)<\/a>. <\/p>\n Revolve (RVLV)<\/p>\n Market Cap: $1.70 billion<\/p>\n Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve (NASDAQ: RVLV<\/a>) is a fashion retailer leveraging social media and a community of fashion influencers to drive its merchandising strategy. <\/p>\n Why Are We Out on RVLV?<\/p>\n Competition may be pulling attention away from its platform as its 6.5% average growth in active customers was choppyConcerning trends in both user engagement and monetization suggest its platform\u2019s efficacy is declining as its average revenue per buyer fell by 1.5% annuallyFalling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term<\/p>\n At $24.30 per share, Revolve trades at 32.7x forward EV\/EBITDA. Read our free research report to see why you should think twice about including RVLV in your portfolio<\/a>. <\/p>\n Udemy (UDMY)<\/p>\n Market Cap: $1.08 billion<\/p>\n With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ: UDMY<\/a>) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.<\/p>\n Why Is UDMY Not Exciting?<\/p>\n Focus on expanding its platform came at the expense of monetization as its average revenue per buyer fell by 1.3% annuallyProjected sales are flat for the next 12 months, implying demand will slow from its three-year trendExcessive marketing spend signals little organic demand and traction for its platform<\/p>\n Udemy\u2019s stock price of $7.35 implies a valuation ratio of 11.5x forward EV\/EBITDA. If you\u2019re considering UDMY for your portfolio, see our FREE research report to learn more<\/a>. <\/p>\n Stocks We Like More<\/p>\n Trump\u2019s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines. <\/p>\n Take advantage of the rebound by checking out our Top 6 Stocks for this week<\/a>. 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). <\/p>\n 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free<\/a>. Find your next big winner with StockStory today<\/a>. Find your next big winner with StockStory today<\/a><\/p>\n