StockStory has identified Fiverr, Wayfair, and EverQuote as three internet stocks that investors should likely ignore due to concerns over demand and valuation. The firm's analysis comes as the broader consumer internet sector has underperformed the S&P 500 over the past six months, with the industry returning 8.2% compared to the index's 12.8% gain. This underperformance reflects growing unease that demand in the sector hinges heavily on volatile consumer spending habits.
Fiverr, based in Tel Aviv and operating a fixed-price global freelance marketplace, faces specific headwinds according to StockStory. The company's market cap stands at $313.5 million, but the firm notes that intense competition is diverting traffic, resulting in a 14% annual decline in active buyers. StockStory forecasts a 23% revenue decline for the upcoming 12 months, suggesting a sharp drop in demand. Additionally, the firm points to excessive marketing spend as a signal of limited organic traction. At $8.70 per share, Fiverr trades at 1.2x forward price-to-gross profit.
Wayfair, an online retailer of mass-market home goods founded in 2002 by Niraj Shah, presents a different set of challenges. With a market cap of $14.48 billion, the company operates in the US, UK, Canada, and Germany. StockStory highlights struggles with new customer acquisition, noting that active customers have averaged 2.2% declines. Wall Street estimates imply tepid growth of 7.4% over the next 12 months, indicating soft demand ahead. The company's gross margin of 30% is below that of its competitors, which StockStory argues limits funds available for marketing and research and development. Wayfair shares are trading at $105.74, or 17.3x forward EV/EBITDA.
EverQuote, an online insurance marketplace where consumers compare and purchase policies from various providers, also drew caution from the firm. The company's market cap is $697.7 million. StockStory's primary concern is high marketing expenses, which suggest EverQuote must spend heavily on new customer acquisition to sustain momentum. The stock is priced at $19.80 per share, implying a valuation ratio of 4.5x forward EV/EBITDA.
StockStory promotes its research reports as a tool for understanding these risks and identifying alternative opportunities. The firm also highlights its AI system for stock selection, claiming it flagged Palantir before a run of 1,662% between October 2022 and February 2026, AppLovin before a 753% rise between February 2024 and February 2026, and Nvidia before an 1,178% increase between January 2023 and February 2026. The system currently produces six new names weekly that pass specific tests.