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 are three mid-cap stocks to swipe left on and some alternatives you should look into instead.

Lattice Semiconductor (LSCC)

Market Cap: $17.22 billion

A global leader in its category, Lattice Semiconductor (NASDAQ: LSCC) is a semiconductor designer specializing in customer-programmable chips that enhance CPU performance for intensive tasks such as machine learning.

Why Are We Cautious About LSCC?

1. Sales tumbled by 9% annually over the last two years, showing market trends are working against its favor during this cycle
2. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 16.2 percentage points
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 4.7 percentage points

Lattice Semiconductor’s stock price of $126.35 implies a valuation ratio of 64.8x forward P/E. To fully understand why you should be careful with LSCC, check out our full research report (it’s free).

Darden (DRI)

Market Cap: $22.08 billion

Founded in 1968 as Red Lobster, Darden (NYSE: DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.

Why Are We Wary of DRI?

1. The company has faced growth challenges as its 6.1% annual revenue increases over the last seven years fell short of other restaurant companies
2. Gross margin of 21.8% is below its competitors, leaving less money for marketing and promotions
3. Earnings growth underperformed the sector average over the last seven years as its EPS grew by just 9% annually

Darden is trading at $193.25 per share, or 17.5x forward P/E. Check out our free in-depth research report to learn more about why DRI doesn’t pass our bar.

Generac (GNRC)

Market Cap: $15.73 billion

With its name deriving from a combination of “generating” and “AC”, Generac (NYSE: GNRC) offers generators and other power products for residential, industrial, and commercial use.

Why Does GNRC Fall Short?

1. 3.7% annual revenue growth over the last two years was slower than its industrials peers
2. Earnings per share have dipped by 2.9% annually over the past five years, which is concerning because stock prices follow EPS over the long term
3. Waning returns on capital imply its previous profit engines are losing steam

At $267.00 per share, Generac trades at 29.5x forward P/E. Dive into our free research report to see why there are better opportunities than GNRC.

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