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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. 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:
Zillow (ZG)
Market Cap: $17.38 billion
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.
Why Do We Pass on ZG?
- Products and services aren't resonating with the market as its revenue declined by 7.6% annually over the last five years
- Poor expense management has led to operating margin losses
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Zillow is trading at $69.85 per share, or 37.3x forward P/E. Read our free research report to see why you should think twice about including ZG in your portfolio.
Hologic (HOLX)
Market Cap: $14.44 billion
As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ: HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.
Why Are We Wary of HOLX?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 23.2 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $65.08 per share, Hologic trades at 14.6x forward P/E. If you’re considering HOLX for your portfolio, see our FREE research report to learn more.
One Mid-Cap Stock to Buy:
Kinsale Capital Group (KNSL)
Market Cap: $11.1 billion
Founded in 2009 during the aftermath of the financial crisis when many insurers were retreating from riskier markets, Kinsale Capital Group (NYSE: KNSL) is an insurance company that specializes in writing policies for hard-to-place, unusual, or high-risk businesses that standard insurers typically avoid.
Why Is KNSL a Good Business?
- Impressive 28.4% annual net premiums earned growth over the last two years indicates it’s winning market share this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 37.6% over the last two years outstripped its revenue performance
- Annual book value per share growth of 38.8% over the last two years was superb and indicates its capital strength increased during this cycle
Kinsale Capital Group’s stock price of $476.16 implies a valuation ratio of 5.9x forward P/B. Is now a good time to buy? Find out in our full 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 6 Stocks for this week. 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-small-cap company Comfort Systems (+782% 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
