Motley Fool Money – Hidden Gem Stocks We Love at the End of the Year

Date: December 18, 2025
Host: Jason Hall
Guests: Dan Kapplinger, John Quass

Episode Overview

In this roundtable episode, Motley Fool analysts Jason Hall, Dan Kapplinger, and John Quass discuss their top “hidden gem” stocks to consider buying as 2025 draws to a close. While "hidden gems" often evokes little-known, small-cap companies, this episode focuses on three well-known yet underestimated companies that the analysts believe are trading at attractive valuations and have strong future potential: Airbnb, Lululemon, and Alphabet (Google’s parent company). The team dives into the growth prospects, competitive advantages, strategic direction, and catalysts for each pick, closing out with bullish five-year predictions—and for once, all three agree on the top pick.

Key Discussion Points & Insights

1. Airbnb (ABNB) – A Moated Business Still Printing Cash

[00:55 – 06:15]

• Dominant Brand & Market Growth: John Quass describes Airbnb as “the dominant player” in the short-term rental space and praises its “brand moat.” Despite underwhelming stock performance since its early-2021 peak, John maintains that the company’s reasonable double-digit revenue growth in an expanding market makes it a hidden gem.

• Brand Loyalty Evidence: Referencing third-party research (AirDNA), John points out that most hosts either list only on Airbnb or on Airbnb plus other platforms—rarely without Airbnb, showing the company’s entrenched market position.

  “It’s either Airbnb alone or Airbnb plus. But never without Airbnb. That, to me, shows the moat here.” – John Quass [02:38]

• Investment in Experiences & Optionality: Half of Airbnb Experiences bookings now don’t require a stay, indicating successful diversification. The company has invested $200 million in new business ideas this year.

  “This is throwing spaghetti at the wall for sure. But it has extra cash on hand, so it can afford to invest in these new ideas.” – John Quass [03:35]

• Valuation & Buybacks: The company trades at 18× free cash flow, is buying back shares, and can afford patience—thanks to its cash generation and strong position.

• Potential Growth Catalysts: Dan Kapplinger notes CEO Brian Chesky’s publicity strategy—living in Airbnbs—as potentially resonating with an older travel demographic. Importantly, Dan highlights that traditional hotels are now cross-listing on Airbnb, sometimes at rates lower than their own loyalty programs:

  “I was shocked at…the pricing on the hotel rooms on Airbnb is sometimes cheaper than what you get from aggregator sites.” – Dan Kapplinger [05:21]
  “I just never expected a traditional hotel to be so interested in Airbnb. I think that’s a potential growth driver as well.” [06:02]

2. Lululemon (LULU) – A Fallen Favorite Primed to Rebound

[08:16 – 13:05]

• Past Successes & Current Struggles: Dan tracks the stock from its 15× rise since IPO through a 70% plunge from early-2024 highs, largely due to slowing North America growth and recent C-suite turnover.
• Resilience History: Dan recalls a previous crisis (the 2012-2014 “see-through yoga pants” scandal) after which Lululemon reinvented itself and generated 10× returns over the next decade.

  “It took a while for the company to right the ship after that big boondoggle. But…the payoff was the stock was a ten-bagger by 2021.” – Dan Kapplinger [10:09]

• CEO Change & Activist Interest: After disappointing earnings and news that CEO Calvin McDonald is stepping down, Elliott Management has taken a $1B stake and suggested Jane Nielsen (ex-Ralph Lauren). The stock is “in play,” with investors hopeful for turnaround.
• Sound Business Fundamentals: John downplays the crisis narrative, noting Lululemon’s inventory and margins are healthy—contrary to true “bad” apparel businesses. He warns against overcorrection by a new CEO:

  “It’s just having a slowdown. And so I’m worried that a new manager could come in here and overcorrect, when in reality it’s kind of stay the course.” – John Quass [11:24]

• Distribution Control as Moat: Jason points out that even amid fierce competition, Lululemon’s tight grip on distribution channels protects its margins and brand, differentiating it from other apparel retailers.

3. Alphabet (GOOGL) – Hiding in Plain Sight

[14:17 – 17:32]

• Why Alphabet is a “Hidden Gem”: Despite its Mag 7 status and a sharp stock recovery (up 55% in 2025, nearly doubling since April lows), Jason dubs Alphabet a hidden gem due to multidimensional optionality overlooked by many investors.

  “It’s not because it’s undiscovered, but rather because investors tend to think about it one-dimensionally…” – John Quass [16:13]

• AI & Cloud as New Catalysts: Fears that AI would erode Alphabet’s ad-driven search business have been overblown. Instead, Gemini AI and Google Cloud are delivering real traction, and the core ad business remains resilient.
• Underappreciated Assets: Jason likens YouTube to a “Netflix bolted onto it,” but with a lower-risk, profit-sharing model. He notes YouTube TV has quietly become one of America’s largest cable companies. Waymo (self-driving cars) is seeing exponential ride growth, with a goal to hit a million rides a week soon.

  “Eventually, [Waymo] is going to be a big business. It’s going to feel like an overnight success, but it will have actually taken 15 to 20 years to build out.” – Jason Hall [16:05]

• Analyst Convictions: Dan and John both praise the breadth and underappreciated optionality in Alphabet:

  “As an analyst, I can barely keep up with everything it is doing and succeeding in…there are underappreciated, optionality aspects of the business.” – John Quass [16:31]
  “Good on you, Jason.” – Dan Kapplinger on Jason’s recent Alphabet buy [17:28]

Notable Quotes & Memorable Moments

• On Airbnb’s Brand Moat and Optionality:

  “It’s either Airbnb alone or Airbnb plus. But never without Airbnb.” – John Quass [02:38]

• On Lululemon’s Past and Potential Comeback:

  “It took a while for the company to right the ship after that big boondoggle. But…the payoff was the stock was a ten-bagger by 2021.” – Dan Kapplinger [10:09]

• On Alphabet’s Optionality and Long-Term Potential:

  “This business can win every way from Thursday…as an analyst, I can barely keep up with everything that it is doing and succeeding in.” – John Quass [16:16]

Segment Timestamps

• [00:55] – Airbnb as a Hidden Gem (John’s pick)
  • Market position, brand moat, and expansion beyond lodging to services/experiences.
• [04:45] – CEO’s Lifestyle, Older Traveler Appeal, and Hotel Partnerships (Dan)
• [08:16] – Lululemon: Fallen Out of Favor, Turnaround Potential (Dan’s pick)
  • History of resilience, CEO change, activist involvement, healthy financials.
• [14:17] – Alphabet: “Mag 7” with Hidden Gem Characteristics (Jason’s pick)
  • AI, cloud, YouTube, Waymo, undervalued optionality.
• [17:32] – Roundtable: Five-Year Biggest Winner Prediction
  • All three analysts pick Lululemon as having the “clearest path to doubling in value.”

  “I believe that Lululemon has the clearest path to doubling in value over the next five years.” – John Quass [17:43] “All three of us? … It’s a first, Jason. I’m not sure that’s ever happened before.” – Dan Kapplinger [19:19]

Consensus & Closing Insights

• All three analysts agree Lululemon is the hidden gem with the highest five-year upside, citing a strong balance of growth, valuation, and brand durability.
• Airbnb is compelling but somewhat riskier, as investors await evidence of successful new ventures and improved multiples.
• Alphabet is still a dominant force with broad optionality, but the current price and lofty expectations make it less undervalued than before.
• The “hidden gem” lesson: Sometimes the most exciting investment opportunities are familiar names trading at a discount when sentiment is overly negative or focused too narrowly.

End of Summary