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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one mid-cap stock with massive growth potential and two that could be down big.
Two Mid-Cap Stocks to Sell:
F5 (FFIV)
Market Cap: $16.38 billion
Initially started as a hardware appliances company in the late 1990s, F5 (NASDAQ:FFIV) makes software that helps large enterprises ensure their web applications are always available by distributing network traffic and protecting them from cyberattacks.
Why Does FFIV Give Us Pause?
- 2.7% annual revenue growth over the last three years was slower than its software peers
- Products, pricing, or go-to-market strategy may need some adjustments as its 4.5% average billings growth over the last year was weak
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.5%
F5 is trading at $283.57 per share, or 5.6x forward price-to-sales. Read our free research report to see why you should think twice about including FFIV in your portfolio.
Snap-on (SNA)
Market Cap: $17.5 billion
Founded in 1920, Snap-on (NYSE:SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.
Why Does SNA Fall Short?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Projected sales growth of 2.7% for the next 12 months suggests sluggish demand
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 4.2 percentage points
At $334.08 per share, Snap-on trades at 16.5x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than SNA.
One Mid-Cap Stock to Watch:
Globus Medical (GMED)
Market Cap: $10.9 billion
Founded in 2003, Globus Medical (NYSE:GMED) develops and manufactures medical devices and solutions for musculoskeletal disorders, with a focus on products for spine surgery, orthopedic trauma, and joint reconstruction.
Why Could GMED Be a Winner?
- Business is well-positioned no matter the global macroeconomic backdrop as its constant currency revenue growth averaged 64.2% over the past two years
- Earnings per share grew by 12.5% annually over the last five years and easily exceeded the peer group average
- GMED is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Globus Medical’s stock price of $78.53 implies a valuation ratio of 23.3x forward price-to-earnings. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.
Put yourself in the driver’s seat 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.