Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations. However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. That said, here is one mid-cap stock with massive growth potential and two best left ignored.
Two Mid-Cap Stocks to Sell:
Seagate Technology (STX)
Market Cap: $26.95 billion
The developer of the original 5.25inch hard disk drive, Seagate (NASDAQ: STX) is a leading producer of data storage solutions, including hard drives and Solid State Drives (SSDs) used in PCs and data centers.
Why Do We Think Twice About STX?
- Annual sales declines of 3.8% for the past five years show its products and services struggled to connect with the market during this cycle
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 28.4%
- Low free cash flow margin of 8.3% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Seagate Technology’s stock price of $127 implies a valuation ratio of 14.2x forward P/E. Read our free research report to see why you should think twice about including STX in your portfolio.
Church & Dwight (CHD)
Market Cap: $24.4 billion
Best known for its Arm & Hammer baking soda, Church & Dwight (NYSE: CHD) is a household and personal care products company with a vast portfolio that spans laundry detergent to toothbrushes to hair removal creams.
Why Does CHD Fall Short?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Estimated sales growth of 1% for the next 12 months implies demand will slow from its three-year trend
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 4.9 percentage points
Church & Dwight is trading at $99.07 per share, or 26.3x forward P/E. Dive into our free research report to see why there are better opportunities than CHD.
One Mid-Cap Stock to Buy:
Duolingo (DUOL)
Market Cap: $23.32 billion
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ: DUOL) is a mobile app helping people learn new languages.
Why Should You Buy DUOL?
- Has the opportunity to boost monetization through new features and premium offerings as its monthly active users have grown by 39.8% annually over the last two years
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 178% annually, topping its revenue gains
- Robust free cash flow margin of 34.4% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $511.12 per share, Duolingo trades at 82.9x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
