Quality compounders are well-oiled machines. Their competitive advantages allow them to make profits consistently and reinvest them into projects that generate even more profits, creating a virtuous cycle of returns.
Companies such as these set the gold standard in public market investing. That said, here are three quality compounders that deserve a spot on your list.
Pinterest (PINS)
Market Cap: $12.78 billion
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Why Is PINS a Top Pick?
- Has the opportunity to boost monetization through new features and premium offerings as its monthly active users have grown by 11.2% annually over the last two years
- Share repurchases over the last three years enabled its annual earnings per share growth of 40.9% to outpace its revenue gains
- Robust free cash flow margin of 26.5% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute
Pinterest is trading at $22.76 per share, or 10.2x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Robinhood (HOOD)
Market Cap: $89.4 billion
With a mission to democratize finance, Robinhood (NASDAQ: HOOD) is an online consumer finance platform known for its commission-free stock and crypto trading.
Why Are We Bullish on HOOD?
- Monetization efforts are paying off as its average revenue per user has grown by 143% annually over the last two years
- Additional sales over the last three years increased its profitability as the 95.7% annual growth in its earnings per share outpaced its revenue
- HOOD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $99.20 per share, Robinhood trades at 30.1x forward EV/EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Instacart (CART)
Market Cap: $10.99 billion
Powering more than one billion grocery orders since its founding, Instacart (NASDAQ: CART) is an online grocery shopping and delivery platform that partners with retailers to help customers shop from local stores through its app or website.
Why Will CART Outperform?
- Prominent and differentiated platform culminates in a stellar gross margin of 74.1%
- Excellent EBITDA margin of 28.3% highlights the efficiency of its business model, and its profits increased over the last few years as it scaled
- Free cash flow margin grew by 12.5 percentage points over the last few years, giving the company more chips to play with
Instacart’s stock price of $45.98 implies a valuation ratio of 8.4x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
