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 may have trouble.
Two Mid-Cap Stocks to Sell:
MongoDB (MDB)
Market Cap: $32.48 billion
Named after "humongous database," reflecting its ability to handle massive data loads, MongoDB (NASDAQ: MDB) provides a flexible document-based database platform that helps developers build, deploy, and maintain modern applications more efficiently.
Why Are We Hesitant About MDB?
- Prolonged sales cycles signal certain parts of its software must be customized for its large enterprise clients, impeding customer growth
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
- Projected 4.1 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
MongoDB is trading at $401.00 per share, or 8.9x forward price-to-sales. Check out our free in-depth research report to learn more about why MDB doesn’t pass our bar.
Encompass Health (EHC)
Market Cap: $10.19 billion
With a network of 161 specialized facilities across 37 states and Puerto Rico, Encompass Health (NYSE: EHC) operates inpatient rehabilitation hospitals that help patients recover from strokes, hip fractures, and other debilitating conditions.
Why Is EHC Not Exciting?
- Annual revenue growth of 6.5% over the last five years was below our standards for the healthcare sector
- Lagging comparable store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
At $102.73 per share, Encompass Health trades at 17.3x forward P/E. Read our free research report to see why you should think twice about including EHC in your portfolio.
One Mid-Cap Stock to Buy:
SPX Technologies (SPXC)
Market Cap: $11.06 billion
With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE: SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.
Why Are We Bullish on SPXC?
- Impressive 15.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 23.6% annually, topping its revenue gains
- Free cash flow margin grew by 8.1 percentage points over the last five years, giving the company more chips to play with
SPX Technologies’s stock price of $223.58 implies a valuation ratio of 4.1x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
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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.
