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. That said, here are three mid-cap stocks to swipe left on and some alternatives you should look into instead.
Chewy (CHWY)
Market Cap: $11.03 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 Fall Short?
- Annual sales growth of 8.5% over the last three years lagged behind its consumer internet peers as its large revenue base made it difficult to generate incremental demand
- Estimated sales growth of 6.1% 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 29.4%
Chewy’s stock price of $26.46 implies a valuation ratio of 13.8x forward EV/EBITDA. To fully understand why you should be careful with CHWY, check out our full research report (it’s free).
Charles River Laboratories (CRL)
Market Cap: $9.04 billion
Named after the Massachusetts river where it was founded in 1947, Charles River Laboratories (NYSE: CRL) provides non-clinical drug development services, research models, and manufacturing support to pharmaceutical and biotechnology companies.
Why Are We Wary of CRL?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Sales are projected to be flat over the next 12 months and imply weak demand
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Charles River Laboratories is trading at $183.62 per share, or 19.2x forward P/E. Check out our free in-depth research report to learn more about why CRL doesn’t pass our bar.
Franklin Resources (BEN)
Market Cap: $14.01 billion
Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE: BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.
Why Should You Sell BEN?
- Earnings per share fell by 2.5% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Underwhelming 8.3% return on equity reflects management’s difficulties in finding profitable growth opportunities
At $27.01 per share, Franklin Resources trades at 10.6x forward P/E. Read our free research report to see why you should think twice about including BEN in your portfolio.
Stocks We Like More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
