Mid-cap stocks have the best odds of scaling into $100 billion corporations thanks to their tested business models and large addressable markets. But the many opportunities in front of them attract significant competition, spanning from industry behemoths with seemingly infinite resources to small, nimble players with chips on their shoulders.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are two mid-cap stocks with massive growth potential and one that may have trouble.
One Mid-Cap Stock to Sell:
Zimmer Biomet (ZBH)
Market Cap: $18.23 billion
With a history dating back to 1927 and a presence in over 100 countries worldwide, Zimmer Biomet (NYSE: ZBH) designs and manufactures orthopedic products including knee and hip replacements, surgical tools, and robotic technologies for joint reconstruction and spine surgeries.
Why Does ZBH Worry Us?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $92.75 per share, Zimmer Biomet trades at 11.1x forward P/E. To fully understand why you should be careful with ZBH, check out our full research report (it’s free).
Two Mid-Cap Stocks to Watch:
Leonardo DRS (DRS)
Market Cap: $11.62 billion
Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ: DRS) is a provider of defense systems, electronics, and military support services.
Why Is DRS on Our Radar?
- Average backlog growth of 54.4% over the past two years shows it has a steady sales pipeline that will drive future orders
- Additional sales over the last two years increased its profitability as the 17.5% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin expanded by 4.7 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Leonardo DRS is trading at $44.99 per share, or 40.1x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
RB Global (RBA)
Market Cap: $19.76 billion
Born from the 1958 founding of Ritchie Bros. Auctioneers and rebranded in 2023, RB Global (NYSE: RBA) operates global marketplaces that connect buyers and sellers of commercial assets, vehicles, and equipment across multiple industries.
Why Do We Like RBA?
- Annual revenue growth of 52.9% over the past two years was outstanding, reflecting market share gains this cycle
- Adjusted operating margin profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 20.6% annually
RB Global’s stock price of $106.72 implies a valuation ratio of 28.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
