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.
These dynamics can rattle even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. Keeping that in mind, here is one mid-cap stock with a long growth runway and two that could be down big.
Two Mid-Cap Stocks to Sell:
GE HealthCare (GEHC)
Market Cap: $32.71 billion
Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ: GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.
Why Do We Think Twice About GEHC?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.5%
- Adjusted operating margin failed to increase over the last two years, indicating the company couldn’t optimize its expenses
At $71.75 per share, GE HealthCare trades at 12.4x forward P/E. Check out our free in-depth research report to learn more about why GEHC doesn’t pass our bar.
Equitable Holdings (EQH)
Market Cap: $13.61 billion
Tracing its roots back to 1859 as one of America's oldest financial institutions, Equitable Holdings (NYSE: EQH) provides retirement planning, asset management, and life insurance products through its two main franchises, Equitable and AllianceBernstein.
Why Are We Hesitant About EQH?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 2.5% for the last five years
- Day-to-day expenses have swelled relative to revenue over the last two years as its pre-tax profit margin fell by 13.3 percentage points
- Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 167% annually over the last five years
Equitable Holdings is trading at $48.36 per share, or 6.6x forward P/E. To fully understand why you should be careful with EQH, check out our full research report (it’s free).
One Mid-Cap Stock to Buy:
Copart (CPRT)
Market Cap: $28.53 billion
Starting as a single salvage yard in California in 1982, Copart (NASDAQ: CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters.
Why Are We Bullish on CPRT?
- Annual revenue growth of 13.4% over the last five years was superb and indicates its market share increased during this cycle
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
- ROIC punches in at 31.8%, illustrating management’s expertise in identifying profitable investments
Copart’s stock price of $31.01 implies a valuation ratio of 18.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
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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.
