Many investors pay attention to mid-cap stocks because they have established business models and expansive market opportunities. However, their paths to becoming $100 billion corporations are ripe with competition, ranging from giants with vast resources to agile upstarts eager to disrupt the status quo.

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 are three mid-cap stocks to avoid and some other investments you should consider instead.

Coherent (COHR)

Market Cap: $12.54 billion

Created through the 2022 rebranding of II-VI Incorporated, a company with roots dating back to 1971, Coherent (NYSE: COHR) develops and manufactures advanced materials, lasers, and optical components for applications ranging from telecommunications to industrial manufacturing.

Why Does COHR Give Us Pause?

1. Incremental sales over the last two years were much less profitable as its earnings per share fell by 6% annually while its revenue grew
2. 11.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Underwhelming 3.8% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging

Coherent is trading at $80.03 per share, or 19.6x forward P/E. Read our free research report to see why you should think twice about including COHR in your portfolio.

NVR (NVR)

Market Cap: $21.28 billion

Known for its unique land acquisition strategy, NVR (NYSE: NVR) is a respected homebuilder and mortgage company in the United States.

Why Is NVR Not Exciting?

1. Sales pipeline suggests its future revenue growth may not meet our standards as its average backlog growth of 1.5% for the past two years was weak
2. Estimated sales decline of 8.2% for the next 12 months implies a challenging demand environment
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.1% annually

NVR’s stock price of $7,168 implies a valuation ratio of 14.8x forward P/E. Dive into our free research report to see why there are better opportunities than NVR.

Revvity (RVTY)

Market Cap: $10.73 billion

Formerly known as PerkinElmer until its rebranding in 2023, Revvity (NYSE: RVTY) provides health science technologies and services that support the complete workflow from discovery to development and diagnosis to cure.

Why Should You Dump RVTY?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 8.8 percentage points
3. Eroding returns on capital suggest its historical profit centers are aging

At $91.02 per share, Revvity trades at 17.6x forward P/E. Read our free research report to see why you should think twice about including RVTY in your portfolio.

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 176% over the last five years.

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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.