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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here is one mid-cap stock with huge upside potential and two best left ignored.
Two Mid-Cap Stocks to Sell:
Zoom (ZM)
Market Cap: $23.18 billion
Once the verb that defined remote work during the pandemic ("let's Zoom later"), Zoom (NASDAQ: ZM) provides a cloud-based platform for video meetings, phone calls, team chat, and collaboration tools that helps businesses and individuals connect virtually.
Why Are We Out on ZM?
- Offerings struggled to generate meaningful interest as its average billings growth of 4% over the last year did not impress
- Platform has low switching costs as its net revenue retention rate of 98% demonstrates high turnover
- Anticipated sales growth of 4.2% for the next year implies demand will be shaky
At $78.59 per share, Zoom trades at 4.6x forward price-to-sales. Check out our free in-depth research report to learn more about why ZM doesn’t pass our bar.
Illumina (ILMN)
Market Cap: $18.47 billion
Pioneering the ability to read the human genome at unprecedented speed and affordability, Illumina (NASDAQ: ILMN) develops and sells advanced DNA sequencing and microarray technologies that allow researchers and clinicians to analyze genetic variations and functions.
Why Do We Think Twice About ILMN?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Issuance of new shares over the last five years caused its earnings per share growth of 1.5% to lag its revenue gains
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Illumina’s stock price of $120.82 implies a valuation ratio of 23x forward P/E. Dive into our free research report to see why there are better opportunities than ILMN.
One Mid-Cap Stock to Buy:
Dycom (DY)
Market Cap: $9.73 billion
Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE: DY) builds and maintains telecommunications infrastructure.
Why Do We Love DY?
- Impressive 15.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 21.1% over the last two years outstripped its revenue performance
Dycom is trading at $325.20 per share, or 24.1x forward P/E. 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 (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
