My 3 Favorite Stocks to Buy Right Now

Key Points

• Uber will continue to dominate the booming ride-sharing market.

• Costco should keep gaining new cardholders and opening new stores.

• MercadoLibre still leads Latin America’s e-commerce and fintech markets.

• 10 stocks we like better than Uber Technologies ›

As the S&P 500 hovers near its all-time high, it might seem smarter to trim a few positions than to buy new stocks. However, the market's most resilient stocks tend to keep rising over the long term -- so cautious investors who book their profits today could miss out on some big gains.

If you can tune out the near-term noise and plan to hold your stocks for a few years, you should pick a few well-run companies with wide moats, sticky business models, and plenty of room to grow. Three of my favorite stocks that fit this description are Uber (NYSE: UBER), Costco (NASDAQ: COST), and MercadoLibre (NASDAQ: MELI).

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1. Uber

Uber, the world's largest ride-hailing service provider, served 180 million monthly active platform consumers (MAPCs) at the end of June. That's up from 171 million MAPCs at the end of 2024 and 93 million MAPCs at the end of 2020. From 2020 to 2024, its annual revenue grew at a CAGR of 41%. It also turned profitable in 2023 as it right-sized its business with layoffs, divestments, and other cost-cutting measures -- and its net income rose fivefold in 2024.

Uber's rapid growth was driven by its market share gains and the expansion of its Uber One subscription platform. It served 36 million Uber One subscribers at the end of June -- compared to its 30 million subscribers at the end of 2024 -- and it claims those subscribers spend roughly three times as much money as its non-subscribers.

From 2024 to 2027, analysts expect Uber's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at a CAGR of 15% and 28%, respectively. Its stock is still cheap at 18 times next year's adjusted EBITDA, and it should head even higher over the next few years as its core markets continue to expand.

2. Costco

Costco, the world's largest warehouse club retailer, operated 905 warehouses at the end of its latest quarter. That's up from 890 warehouses at the end of fiscal 2024 (which ended last September) and 795 warehouses at the end of fiscal 2020.

From fiscal 2020 to fiscal 2024, its cardholders grew from 105.5 million to 136.8 million, its global renewal rate rose from 88% to 90.5%, its revenue increased at a CAGR of 11%, and its earnings per share (EPS) grew at a CAGR of 16%. It maintained that momentum even after it hiked its membership fees for the first time in seven years in 2024.

Costco's high-margin membership fees allow it to sell its products at nearly breakeven margins to draw in more shoppers. That cycle helps it keep growing as long as it keeps locking in new cardholders, maintaining high renewal rates, and opening new stores. From fiscal 2024 to fiscal 2027, analysts expect Costco's revenue and EPS to grow at a CAGR of 8% and 10%, respectively. It might seem a bit pricey at 49 times next year's earnings, but its evergreen strengths should support that premium valuation.

3. MercadoLibre

MercadoLibre is the largest e-commerce company in Latin America. At the end of 2024, it served over 100 million annual unique active buyers across its marketplaces and 60 million monthly active users across its fintech ecosystem -- which include its Mercado Pago payments platform, its Mercado Crédito lending platform, and other services. It operates across 19 countries, but it generates most of its sales in Brazil, Argentina, and Mexico.

From 2020 to 2024, its revenue grew at a CAGR of 51%. That explosive growth was driven by rising internet penetration rates and income levels across Latin America, as well as the increased usage of its fintech services. Its early mover's advantage and the expansion of its logistics network across difficult terrain helped it fend off overseas challengers like Amazon and regional competitors like Americanas. It also turned consistently profitable over the past three years as it expanded its higher-margin third-party marketplace and leveraged its scale to dilute its payment processing and logistics costs.

From 2024 to 2027, analysts expect MercadoLibre's revenue and EPS to grow at a CAGR of 28% and 34%, respectively. Its business is gradually maturing, but it should keep growing as it expands across smaller markets and rolls out new fintech services. It's still reasonably valued at 35 times next year's earnings, and it deserves to soar much higher.

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Leo Sun has positions in Amazon and MercadoLibre. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, MercadoLibre, and Uber Technologies. The Motley Fool has a disclosure policy.