Investors who choose to buy businesses that have huge potential for expansion are possibly setting up their portfolios for impressive returns. The key, however, is finding the companies that have staying power and durable trajectories, as opposed to those that might quickly see their gains erode.
There's one unstoppable growth stock, which is up 104% in the past three years, but down 30% from its peak (as of Feb. 13), that passes the test. Here are three reasons to buy the dip.
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1. Growth remains robust
During the fourth quarter of 2025 (ended Dec. 31), Uber (UBER +1.30%) reported 20% year-over-year revenue growth. This was driven by a 22% jump in gross bookings. Huge gains were registered in both the mobility and delivery segments.
This is an extremely scalable business model, too. The operating margin was 10.7% in 2025. Exactly three years ago in 2022, there was a $1.8 billion operating loss. Looking out to 2028, Wall Street consensus analyst estimates call for operating income to rise at a compound annual rate of 31%.
2. Key competitive strengths
The clearest signal that you're looking at a high-quality business is the presence of an economic moat. This important trait allows a business to fend off competition for a long stretch of time. And it means that the company has a strong industry position.
Uber's brand can't be ignored. As a category creator, the company's name is often used interchangeably as a verb. This demonstrates incredible mindshare among consumers. And once this is achieved, it's extremely difficult to weaken.
What's more, Uber benefits from a powerful network effect. On the mobility side, it completed 3.8 billion trips in Q4 and has 9.7 million monthly active drivers and couriers around the world. The more users there are on the platform, whether riders or drivers, the better the service becomes. There are shorter wait times, pricing gets better, and drivers can earn more money.
The same concept applies to the delivery segment. And with more merchants and restaurants available on Uber, consumers gain from having greater choice.
NYSE: UBER
Key Data Points
3. An attractive valuation
"Uber accelerated into another record-breaking quarter, with more than 200 million monthly users completing more than 40 million trips every day -- our largest and most engaged consumer base ever," CEO Dara Khosrowshahi said in the Q4 earnings press release.
"Uber is a once-in-a-generation company with enormous opportunity still ahead," departing CFO Prashanth Mahendra-Rajah added.
From a fundamental perspective, Uber's business is humming along. Management's upbeat commentary points to this reality.
Uber shares now trade at a forward price-to-earnings multiple of 21.1 that's at a discount to the S&P 500 index. It's time for investors to buy this growth stock.
