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.
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. Keeping that in mind, here are three mid-cap stocks to swipe left on and some alternatives you should look into instead.
GoDaddy (GDDY)
Market Cap: $18.33 billion
Known for its memorable Super Bowl commercials that put it on the map, GoDaddy (NYSE: GDDY) is a domain registrar and web services provider that helps entrepreneurs establish an online presence through domain registration, website building, hosting, and e-commerce tools.
Why Is GDDY Risky?
- Average bookings growth of 8.1% over the last year was mediocre and suggests fewer customers signed long-term contracts
- Anticipated sales growth of 6.9% for the next year implies demand will be shaky
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 64%
At $132.50 per share, GoDaddy trades at 3.7x forward price-to-sales. Read our free research report to see why you should think twice about including GDDY in your portfolio.
Chewy (CHWY)
Market Cap: $15.03 billion
Founded by Ryan Cohen, who later became known for his involvement in GameStop, Chewy (NYSE: CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.
Why Does CHWY Give Us Pause?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 9% for the last three years
- Estimated sales growth of 5.9% for the next 12 months implies demand will slow from its three-year trend
- Bad unit economics and steep infrastructure costs are reflected in its low gross margin of 29.2%
Chewy is trading at $36.23 per share, or 19.8x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than CHWY.
Packaging Corporation of America (PKG)
Market Cap: $19.06 billion
Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection.
Why Do We Think Twice About PKG?
- Sales trends were unexciting over the last five years as its 5.7% annual growth was below the typical industrials company
- High input costs result in an inferior gross margin of 22.7% that must be offset through higher volumes
- Diminishing returns on capital suggest its earlier profit pools are drying up
Packaging Corporation of America’s stock price of $216.01 implies a valuation ratio of 18.7x forward P/E. If you’re considering PKG for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. 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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