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.
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 a long growth runway and two that may have trouble.
Two Mid-Cap Stocks to Sell:
Domino's (DPZ)
Market Cap: $16.59 billion
Founded by two brothers in Michigan, Domino’s (NYSE: DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.
Why Are We Wary of DPZ?
- Lackluster 5.4% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Projected sales growth of 5.3% for the next 12 months suggests sluggish demand
Domino's is trading at $480.09 per share, or 27.7x forward price-to-earnings. If you’re considering DPZ for your portfolio, see our FREE research report to learn more.
Clorox (CLX)
Market Cap: $19.2 billion
Founded in 1913 with bleach as the sole product offering, Clorox (NYSE: CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.
Why Are We Hesitant About CLX?
- Sales were flat over the last three years, indicating it's failed to expand its business
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Free cash flow margin has stayed in place over the last year
Clorox’s stock price of $156.25 implies a valuation ratio of 22x forward price-to-earnings. To fully understand why you should be careful with CLX, check out our full research report (it’s free).
One Mid-Cap Stock to Watch:
CAVA (CAVA)
Market Cap: $10.13 billion
Starting from a single Washington, D.C. location, CAVA (NYSE: CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Why Is CAVA on Our Radar?
- Average same-store sales growth of 16% over the past two years indicates its restaurants are resonating with diners
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 69.2% annually, topping its revenue gains
- Free cash flow margin expanded by 11.2 percentage points over the last year, providing additional flexibility for investments and share buybacks/dividends
At $86.64 per share, CAVA trades at 147.7x forward price-to-earnings. Is now a good time to buy? See for yourself in our comprehensive 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 6 Stocks for this week. 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 Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
