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. Keeping that in mind, here is one mid-cap stock with huge upside potential and two that could be down big.

Two Mid-Cap Stocks to Sell:

Woodward (WWD)

Market Cap: $15.79 billion

Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ: WWD) designs, services, and manufactures energy control products and optimization solutions.

Why Are We Hesitant About WWD?

1. Muted 4.9% annual revenue growth over the last five years shows its demand lagged behind its industrials peers
2. Earnings per share lagged its peers over the last five years as they only grew by 7.1% annually
3. Free cash flow margin dropped by 11.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $263.25 per share, Woodward trades at 36.9x forward P/E. Check out our free in-depth research report to learn more about why WWD doesn’t pass our bar.

Jefferies (JEF)

Market Cap: $11.53 billion

Tracing its roots back to 1962 and rebranded from Leucadia National Corporation in 2018, Jefferies Financial Group (NYSE: JEF) is a global investment banking and capital markets firm that provides advisory services, securities trading, and asset management to corporations, institutions, and wealthy individuals.

Why Do We Think Twice About JEF?

1. Muted 6.6% annual revenue growth over the last five years shows its demand lagged behind its financials peers
2. Performance over the past five years shows its incremental sales were less profitable, as its 5.6% annual earnings per share growth trailed its revenue gains

Jefferies is trading at $55.14 per share, or 1.2x forward P/E. To fully understand why you should be careful with JEF, check out our full research report (it’s free for active Edge members).

One Mid-Cap Stock to Buy:

Lululemon (LULU)

Market Cap: $20.12 billion

Originally serving yogis and hockey players, Lululemon (NASDAQ: LULU) is a designer, distributor, and retailer of athletic apparel for men and women.

Why Is LULU a Top Pick?

1. Same-store sales growth averaged 5.3% over the past two years, showing it’s bringing new and repeat shoppers into its stores
2. Differentiated product assortment leads to a best-in-class gross margin of 58.8%
3. Robust free cash flow margin of 13.7% gives it many options for capital deployment

Lululemon’s stock price of $169.42 implies a valuation ratio of 14x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.

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