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 huge upside potential and two that could be down big.
Two Mid-Cap Stocks to Sell:
Carlyle (CG)
Market Cap: $14.19 billion
Founded in 1987 with just $5 million in capital and named after the iconic New York hotel where the founders first met, The Carlyle Group (NASDAQ: CG) is a global investment firm that raises, manages, and deploys capital across private equity, credit, and investment solutions.
Why Are We Wary of CG?
- Muted 3.6% annual revenue growth over the last two years shows its demand lagged behind its financials peers
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 5.7% annually
Carlyle’s stock price of $40.12 implies a valuation ratio of 9.9x forward P/E. Check out our free in-depth research report to learn more about why CG doesn’t pass our bar.
PulteGroup (PHM)
Market Cap: $21.69 billion
Having delivered over 850,000 homes since its founding in 1950, PulteGroup (NYSE: PHM) is one of America's largest homebuilders, constructing single-family homes, townhouses, and condominiums for first-time, move-up, and active adult buyers across 46 markets in 25 states.
Why Do We Avoid PHM?
- Annual sales declines of 1.3% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share have contracted by 12.2% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Diminishing returns on capital suggest its earlier profit pools are drying up
PulteGroup is trading at $115.28 per share, or 11.1x forward P/E. Read our free research report to see why you should think twice about including PHM in your portfolio.
One Mid-Cap Stock to Watch:
Advanced Energy (AEIS)
Market Cap: $12.19 billion
Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ: AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.
Why Could AEIS Be a Winner?
- Market share has increased this cycle as its 16.3% annual revenue growth over the last two years was exceptional
- Market share is on track to rise over the next 12 months as its 36.6% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 46.8% annually
At $305.95 per share, Advanced Energy trades at 21.6x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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.
