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. Keeping that in mind, here is one mid-cap stock with massive growth potential and two that could be down big.
Two Mid-Cap Stocks to Sell:
DocuSign (DOCU)
Market Cap: $15.74 billion
Founded by Seattle-based entrepreneur Tom Gonser, DocuSign (NASDAQ: DOCU) is the pioneer of e-signature and offers software as a service that allows people and organisations to sign legally binding documents electronically.
Why Does DOCU Give Us Pause?
- Annual revenue growth of 10.8% over the last three years was below our standards for the software sector
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 6.4% underwhelmed
- Estimated sales growth of 5.9% for the next 12 months implies demand will slow from its three-year trend
At $77.84 per share, DocuSign trades at 5.2x forward price-to-sales. If you’re considering DOCU for your portfolio, see our FREE research report to learn more.
News Corp (NWSA)
Market Cap: $17.67 billion
Established in 2013 after a restructuring, News Corp (NASDAQ: NWSA) is a multinational conglomerate known for its news publishing, broadcasting, digital media, and book publishing.
Why Do We Think NWSA Will Underperform?
- Annual sales declines of 2.5% for the past five years show its products and services struggled to connect with the market
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.5%
- Underwhelming 6.3% return on capital reflects management’s difficulties in finding profitable growth opportunities
News Corp is trading at $29.72 per share, or 33.3x forward P/E. Dive into our free research report to see why there are better opportunities than NWSA.
One Mid-Cap Stock to Buy:
United Therapeutics (UTHR)
Market Cap: $12.96 billion
Founded by a mother seeking treatment for her daughter's pulmonary arterial hypertension, United Therapeutics (NASDAQ: UTHR) develops and commercializes medications for chronic lung diseases and other life-threatening conditions, with a focus on pulmonary hypertension treatments.
Why Are We Bullish on UTHR?
- Market share has increased this cycle as its 22.9% annual revenue growth over the last two years was exceptional
- UTHR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- Improving returns on capital reflect management’s ability to monetize investments
United Therapeutics’s stock price of $287.35 implies a valuation ratio of 9.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
