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 are three mid-cap stocks to pass on and some alternatives you should look into instead.
Ralph Lauren (RL)
Market Cap: $21.65 billion
Originally founded as a necktie company, Ralph Lauren (NYSE: RL) is an iconic American fashion brand known for its classic and sophisticated style.
Why Should You Sell RL?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Poor expense management has led to an operating margin of 15% that is below the industry average
- Poor free cash flow margin of 11.6% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Ralph Lauren is trading at $362.34 per share, or 18.5x forward P/E. Read our free research report to see why you should think twice about including RL in your portfolio.
Tapestry (TPR)
Market Cap: $23.44 billion
Originally founded as Coach, Tapestry (NYSE: TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.
Why Do We Steer Clear of TPR?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Projected 3.2 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
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Tapestry’s stock price of $117.65 implies a valuation ratio of 15x forward P/E. Check out our free in-depth research report to learn more about why TPR doesn’t pass our bar.
Flutter Entertainment (FLUT)
Market Cap: $12.98 billion
With its digital fingerprints on nearly every aspect of global gambling, from the Super Bowl bettor to the online poker aficionado, Flutter Entertainment (NASDAQ: FLUT) operates a portfolio of leading online sports betting and gaming brands including FanDuel, PokerStars, Paddy Power, and Sky Betting & Gaming.
Why Are We Out on FLUT?
- The company has faced growth challenges as its 19.3% annual revenue increases over the last five years fell short of other consumer discretionary companies
- Free cash flow margin is projected to show no improvement next year
- Returns on capital are growing as management invests in more worthwhile ventures
At $74.82 per share, Flutter Entertainment trades at 12.7x forward P/E. Dive into our free research report to see why there are better opportunities than FLUT.
Stocks We Like More
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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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
