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. Keeping that in mind, here is one mid-cap stock with a long growth runway and two that may have trouble.
Two Mid-Cap Stocks to Sell:
Hyatt Hotels (H)
Market Cap: $16.33 billion
Founded in 1957, Hyatt Hotels (NYSE:H) is a global hospitality company with a portfolio of 20 premier brands and over 950 properties across 65 countries.
Why Do We Pass on H?
- Lackluster 3.3% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $176.71 per share, Hyatt Hotels trades at 46.3x forward P/E. If you’re considering H for your portfolio, see our FREE research report to learn more.
CooperCompanies (COO)
Market Cap: $13.84 billion
With a history dating back to 1958 and a portfolio spanning two distinct healthcare segments, Cooper Companies (NASDAQ:COO) develops and manufactures medical devices focused on vision care through contact lenses and women's health including fertility products and services.
Why Does COO Fall Short?
- Sales trends were unexciting over the last two years as its 6.5% annual growth was below the typical healthcare company
- Free cash flow margin dropped by 2.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Low returns on capital reflect management’s struggle to allocate funds effectively
CooperCompanies’s stock price of $70.79 implies a valuation ratio of 15.4x forward P/E. To fully understand why you should be careful with COO, check out our full research report (it’s free).
One Mid-Cap Stock to Buy:
Guidewire Software (GWRE)
Market Cap: $16.74 billion
With its systems powering the operations of hundreds of insurance brands across 42 countries, Guidewire Software (NYSE:GWRE) provides a technology platform that helps property and casualty insurance companies manage their core operations, digital engagement, and analytics.
Why Is GWRE a Top Pick?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 20.6% over the last year
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Highly efficient business model is illustrated by its impressive 8.2% operating margin, and its rise over the last year was fueled by some leverage on its fixed costs
Guidewire Software is trading at $201 per share, or 9.9x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.