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. That said, here is one mid-cap stock with a long growth runway and two that could be down big.

Two Mid-Cap Stocks to Sell:

U-Haul (UHAL)

Market Cap: $10.98 billion

Founded by a husband and wife duo, U-Haul (NYSE: UHAL) is a provider of rental trucks and storage facilities.

Why Is UHAL Risky?

1. Sales were flat over the last two years, indicating it’s failed to expand this cycle
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 36.3 percentage points
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

At $63.01 per share, U-Haul trades at 2.1x trailing 12-month price-to-sales. Dive into our free research report to see why there are better opportunities than UHAL.

XPO (XPO)

Market Cap: $14.44 billion

Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE: XPO) is a transportation company specializing in expedited shipping services.

Why Do We Think XPO Will Underperform?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 10.7% annually over the last five years
2. Earnings per share have dipped by 1.5% annually over the past five years, which is concerning because stock prices follow EPS over the long term
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.7 percentage points

XPO is trading at $122.56 per share, or 30.1x forward P/E. Read our free research report to see why you should think twice about including XPO in your portfolio.

One Mid-Cap Stock to Watch:

Ulta (ULTA)

Market Cap: $21.21 billion

Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ: ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.

Why Could ULTA Be a Winner?

1. New store openings and solid same-store sales performance have boosted its top-line growth
2. ULTA is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
3. Industry-leading 31.2% return on capital demonstrates management’s skill in finding high-return investments, and its returns are climbing as it finds even more attractive growth opportunities

Ulta’s stock price of $467.38 implies a valuation ratio of 20x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

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.

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