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.
These dynamics can rattle even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. 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:
Estée Lauder (EL)
Market Cap: $29.71 billion
Named after its founder, who was an entrepreneurial woman from New York with a passion for skincare, Estée Lauder (NYSE: EL) is a one-stop beauty shop with products in skincare, fragrance, makeup, sun protection, and men’s grooming.
Why Does EL Fall Short?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Subpar operating margin of -0.7% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Performance over the past three years was negatively impacted by new share issuances as its earnings per share dropped by 16.5% annually, worse than its revenue
Estée Lauder is trading at $82.04 per share, or 27.5x forward P/E. If you’re considering EL for your portfolio, see our FREE research report to learn more.
Affirm (AFRM)
Market Cap: $25.48 billion
Founded by PayPal co-founder Max Levchin with a mission to create honest financial products, Affirm (NASDAQ: AFRM) provides a payment network that allows consumers to make purchases and pay for them over time with transparent, flexible installment loans.
Why Is AFRM Not Exciting?
- Negative return on equity shows that some of its growth strategies have backfired
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital on unfavorable terms if market conditions deteriorate
At $76.27 per share, Affirm trades at 21.3x forward P/E. Dive into our free research report to see why there are better opportunities than AFRM.
One Mid-Cap Stock to Buy:
LPL Financial (LPLA)
Market Cap: $25.99 billion
As the nation's largest independent broker-dealer with no proprietary products of its own, LPL Financial (NASDAQ: LPLA) provides technology, compliance, and business support services to independent financial advisors and institutions who manage investments for retail clients.
Why Are We Bullish on LPLA?
- Annual revenue growth of 32.1% over the last two years was superb and indicates its market share increased during this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 27.2% to outpace its revenue gains
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
LPL Financial’s stock price of $321.30 implies a valuation ratio of 13.3x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
