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 huge upside potential and two that could be down big.

Two Mid-Cap Stocks to Sell:

Lennar (LEN)

Market Cap: $27.74 billion

One of the largest homebuilders in America, Lennar (NYSE: LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.

Why Do We Think LEN Will Underperform?

1. Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 20.4% declines over the past two years
2. Incremental sales over the last two years were much less profitable as its earnings per share fell by 11.2% annually while its revenue grew
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 13.5 percentage points

Lennar’s stock price of $107.70 implies a valuation ratio of 10.2x forward P/E. Dive into our free research report to see why there are better opportunities than LEN.

NetApp (NTAP)

Market Cap: $20.73 billion

Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ: NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.

Why Are We Hesitant About NTAP?

1. Muted 1.6% annual revenue growth over the last two years shows its demand lagged behind its business services peers
2. Offerings struggled to generate meaningful interest over the past two years as its average billings growth of 3% did not impress
3. Estimated sales growth of 2.7% for the next 12 months is soft and implies weaker demand

NetApp is trading at $103.27 per share, or 13.4x forward P/E. Read our free research report to see why you should think twice about including NTAP in your portfolio.

One Mid-Cap Stock to Watch:

Doximity (DOCS)

Market Cap: $11.65 billion

Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading social network for U.S. medical professionals.

Why Is DOCS Interesting?

1. Average billings growth of 23.5% over the last year enhances its liquidity and shows there is steady demand for its products
2. Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
3. DOCS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $61.60 per share, Doximity trades at 20.1x forward price-to-sales. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. 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 Tecnoglass (+1,754% 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

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