Mid-cap stocks have the best odds of scaling into $100 billion corporations thanks to their tested business models and large addressable markets. But the many opportunities in front of them attract significant competition, spanning from industry behemoths with seemingly infinite resources to small, nimble players with chips on their shoulders.
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 best left ignored.
Two Mid-Cap Stocks to Sell:
Paylocity (PCTY)
Market Cap: $10.7 billion
Founded by payroll software veteran Steve Sarowitz in 1997, Paylocity (NASDAQ: PCTY) is a provider of payroll and HR software for small and medium-sized enterprises.
Why Do We Think Twice About PCTY?
- Estimated sales growth of 8.5% for the next 12 months implies demand will slow from its three-year trend
- Gross margin of 68.8% is below its competitors, leaving less money to invest in areas like marketing and R&D
Paylocity’s stock price of $192.10 implies a valuation ratio of 6.5x forward price-to-sales. Check out our free in-depth research report to learn more about why PCTY doesn’t pass our bar.
Ralph Lauren (RL)
Market Cap: $17.14 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 Does RL Fall Short?
- Lackluster 2.8% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Estimated sales growth of 4.6% for the next 12 months is soft and implies weaker demand
Ralph Lauren is trading at $289.11 per share, or 21.1x forward P/E. To fully understand why you should be careful with RL, check out our full research report (it’s free).
One Mid-Cap Stock to Watch:
Tenet Healthcare (THC)
Market Cap: $15.3 billion
With a network spanning nine states and serving primarily urban and suburban communities, Tenet Healthcare (NYSE: THC) operates a nationwide network of hospitals, ambulatory surgery centers, and outpatient facilities providing acute care and specialty healthcare services.
Why Do We Like THC?
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 30.7% exceeded its revenue gains over the last five years
- ROIC punches in at 21%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
- Improving returns on capital reflect management’s ability to monetize investments
At $164 per share, Tenet Healthcare trades at 13.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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 5 Growth Stocks for this month. 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.
