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.
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 is one mid-cap stock with massive growth potential and two that could be down big.
Two Mid-Cap Stocks to Sell:
Snap (SNAP)
Market Cap: $16.39 billion
Founded by Stanford University students Evan Spiegel, Reggie Brown, and Bobby Murphy, and originally called Picaboo, Snapchat (NYSE: SNAP) is an image centric social media network.
Why Are We Hesitant About SNAP?
- Focus on expanding its platform has led to weaker growth in its average revenue per user
- Expenses have increased as a percentage of revenue over the last few years as its EBITDA margin fell by 5.2 percentage points
- Incremental sales over the last three years were much less profitable as its earnings per share fell by 10.2% annually while its revenue grew
Snap is trading at $9.79 per share, or 25.4x forward EV/EBITDA. Check out our free in-depth research report to learn more about why SNAP doesn’t pass our bar.
Western Digital (WDC)
Market Cap: $24.08 billion
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Why Do We Pass on WDC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 11.1% annually over the last five years
- Negative 21.4% gross margin means it loses money on every sale and must pivot or scale quickly to survive
- Subpar operating margin of 3.8% constrains its ability to invest in process improvements or effectively respond to new competitive threats
Western Digital’s stock price of $69.30 implies a valuation ratio of 14.4x forward P/E. Dive into our free research report to see why there are better opportunities than WDC.
One Mid-Cap Stock to Watch:
Pinterest (PINS)
Market Cap: $25.49 billion
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Why Does PINS Stand Out?
- Has the opportunity to boost monetization through new features and premium offerings as its monthly active users have grown by 10.4% annually over the last two years
- Healthy EBITDA margin of 27% shows it’s a well-run company with efficient processes
- PINS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $38.05 per share, Pinterest trades at 20.8x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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 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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