2 Brilliant Growth Stocks to Buy Now
The stock market has had a bumpy start to the year, with the S&P 500 down about 6% year to date at the time of writing. While it can be unnerving to watch your investments lose value, market volatility is the price investors have to pay to experience large gains down the road.
That said, here are two growth stocks offering compelling value right now.
Shares of Uber Technologies (NYSE: UBER) have given investors a wild ride since the company's initial public offering in 2019. The important thing is that more people are using Uber's services than ever before. Strong growth has pushed the stock up 182% since 2022, yet it still trades at a modest price-to-earnings (P/E) multiple that undervalues Uber's future growth.
Uber continues to see more people use the platform for ride-sharing and food delivery. In the fourth quarter, its monthly active platform consumers grew 14% year over year to 171 million.
Uber will face increasing competition as Tesla prepares to launch its Cybercab robotaxi service, but Uber's competitive position looks solid. The Uber One membership has 30 million subscribers, up 60% year over year. Plus, 37% of customers are using multiple services, an all-time high.
Uber is making its platform more essential for millions of people needing a ride (or delivery). It is now offering Uber Shuttle at LaGuardia Airport, in addition to partnering with Delta Air Lines to be its exclusive ride-share and delivery partner in the U.S. It also launched an autonomous ride-hailing service in Abu Dhabi with WeRide and has already started to operate an autonomous vehicle fleet in Dallas and Austin, Texas, for food delivery.
Uber is bringing more innovation and services to consumers while delivering excellent financial results. Revenue grew 18% in 2024, while operating income more than doubled to $2.8 billion.
These are strong results for a stock trading at a 16 P/E. That's cheap compared to the S&P 500 earnings multiple of 28. Analysts expect further improvement in margins to grow earnings per share at a 35% annualized rate over the next several years. Uber investors could be looking at spectacular returns by 2030.
Sticking with the theme of innovative platforms disrupting old ways of doing things, Airbnb (NASDAQ: ABNB) has become a go-to platform for people looking for a place to stay while traveling. The stock is offering good value following another year of double-digit growth for the company. It's possible investors could double their money in five years based on where management is investing to drive more growth.
Management has recently made several upgrades to the Airbnb service based on customer feedback, including offering more flexible payment options and improvements to the app. Revenue grew 12% in 2024, which Airbnb earns from service fees.
Airbnb has achieved massive scale, with 491 million nights and experiences booked last year. Still, management sees plenty of growth potential. The $81 billion in total gross bookings last year is mostly generated from Airbnb users that may use the app once or twice per year. Management is looking to expand to other experiences and services to increase the frequency in which people turn to Airbnb, and in turn, expand its revenue opportunity.
To accomplish this goal, management plans to launch at least one new service per year over the next five years. This could potentially increase revenue per user, expand profit margins, and fuel shareholder returns. The growth potential from stretching to adjacent opportunities to travel may not be fully reflected in the stock's valuation.
While Airbnb could experience weaker growth in a recession, Wall Street analysts expect earnings to grow at an annualized rate of 14% over the long term. Assuming the stock is still trading at its current P/E multiple of 30, the stock could double in five years. However, depending on the success it has expanding to new services, Airbnb stock could surprise to the upside.
Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this.
On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $299,728!*
Apple: if you invested $1,000 when we doubled down in 2008, you'd have $39,754!*
Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $480,061!*
Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 14, 2025
John Ballard has positions in Tesla. The Motley Fool has positions in and recommends Airbnb, Tesla, and Uber Technologies. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.
2 Brilliant Growth Stocks to Buy Now was originally published by The Motley Fool
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