Quality compounders are flywheels. Said differently, they’re businesses that generate heaps of profits and consistently reinvest them to produce even more profits. Rinse and repeat.
Companies such as these set the gold standard in public market investing. On that note, here are three quality compounders that deserve a spot on your list.
Uber (UBER)
Market Cap: $197.5 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 Is UBER a Top Pick?
- Monthly Active Platform Consumers have grown by 14.3% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 151% annually, topping its revenue gains
- Free cash flow margin expanded by 15.4 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
Uber is trading at $94.75 per share, or 20.6x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
DoorDash (DASH)
Market Cap: $114.5 billion
Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NYSE:DASH) operates an on-demand food delivery platform.
Why Will DASH Outperform?
- Orders have increased by an average of 20.3% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 111% annually, topping its revenue gains
- Free cash flow margin grew by 11.9 percentage points over the last few years, giving the company more chips to play with
At $268.38 per share, DoorDash trades at 37.2x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
MercadoLibre (MELI)
Market Cap: $125.5 billion
Originally started as an online auction platform, MercadoLibre (NASDAQ:MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Why Should You Buy MELI?
- Has the opportunity to boost monetization through new features and premium offerings as its unique active buyers have grown by 20.7% annually over the last two years
- Switching costs of its platform were on full display over the last two years as it not only grew engagement but also increased the average revenue per user by 15.5% annually
- MELI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
MercadoLibre’s stock price of $2,503 implies a valuation ratio of 24.9x forward EV/EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
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