Whether it be online shopping or social media, secular forces are propelling consumer internet businesses forward. These themes have enabled rapid growth for the industry, which has posted a 8.9% gain over the past six months. This was a good place to be as the S&P 500 shed 1.1% of its value.

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 boasting durable advantages.

Booking (BKNG)

Market Cap: $141 billion

Formerly known as The Priceline Group, Booking Holdings (NASDAQ:BKNG) is the world’s largest online travel agency.

Why Should You Buy BKNG?

1. Room Nights Booked have grown by 13.6% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
2. Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy

Booking is trading at $4,365 per share, or 15.9x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.

Carvana (CVNA)

Market Cap: $22.35 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 Are We Fans of CVNA?

1. Word-of-mouth marketing drives organic user growth, eliminating the need for costly advertising campaigns
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 46.4% over the last three years outstripped its revenue performance
3. Free cash flow margin grew by 30.6 percentage points over the last few years, giving the company more chips to play with

Carvana’s stock price of $173.21 implies a valuation ratio of 12.9x forward EV-to-EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Expedia (EXPE)

Market Cap: $20.24 billion

Originally founded as a part of Microsoft, Expedia (NASDAQ:EXPE) is one of the world’s leading online travel agencies.

Why Do We Like EXPE?

1. Room Nights Booked have increased by an average of 11% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
2. Superior platform functionality and low servicing costs are reflected in its best-in-class gross margin of 88.6%
3. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 104% exceeded its revenue gains over the last three years

At $159.97 per share, Expedia trades at 6.8x forward EV-to-EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

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