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 are two mid-cap stocks with massive growth potential and one that may have trouble.

One Mid-Cap Stock to Sell:

Annaly Capital Management (NLY)

Market Cap: $14.19 billion

Operating as a real estate investment trust since 1996 with a focus on generating income from interest rate spreads, Annaly Capital Management (NYSE: NLY) is a diversified capital manager that invests in agency mortgage-backed securities, residential mortgage loans, and mortgage servicing rights.

Why Do We Pass on NLY?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 22% annually over the last five years
2. Earnings per share have contracted by 5.7% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
3. Tangible book value per share tumbled by 11.1% annually over the last five years, showing banking sector trends are working against its favor during this cycle

At $22.20 per share, Annaly Capital Management trades at 1.2x forward P/B. Read our free research report to see why you should think twice about including NLY in your portfolio.

Two Mid-Cap Stocks to Watch:

Dynatrace (DT)

Market Cap: $14.37 billion

With its platform processing over 30 trillion pieces of IT performance data daily, Dynatrace (NYSE: DT) provides an AI-powered platform that helps organizations monitor, secure, and optimize their applications and IT infrastructure across cloud environments.

Why Do We Like DT?

1. Billings have averaged 18.9% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
2. Software is difficult to replicate at scale and results in a top-tier gross margin of 81.9%
3. Strong free cash flow margin of 26.2% enables it to reinvest or return capital consistently

Dynatrace is trading at $47.66 per share, or 7.1x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.

Medpace (MEDP)

Market Cap: $13.39 billion

Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace (NASDAQ: MEDP) provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.

Why Is MEDP on Our Radar?

1. Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 15.7% over the past two years
2. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. ROIC punches in at 44.1%, illustrating management’s expertise in identifying profitable investments

Medpace’s stock price of $476.69 implies a valuation ratio of 38.8x 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

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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-small-cap company Exlservice (+354% 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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