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 are two mid-cap stocks with massive growth potential and one that could be down big.
One Mid-Cap Stock to Sell:
Wynn Resorts (WYNN)
Market Cap: $10.45 billion
Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ:WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.
Why Is WYNN Risky?
-
2.1% annual revenue growth over the last two years was slower than its consumer discretionary peers
-
Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
-
High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $102.91 per share, Wynn Resorts trades at 23.9x forward P/E. Read our free research report to see why you should think twice about including WYNN in your portfolio, it’s free.
Two Mid-Cap Stocks to Watch:
Medpace (MEDP)
Market Cap: $16.66 billion
Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace (NASDAQ:MEDP) provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.
Why Does MEDP Catch Our Eye?
-
Average organic revenue growth of 17.2% over the past two years demonstrates its ability to expand independently without relying on acquisitions
-
Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
-
Free cash flow margin increased by 6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Medpace’s stock price of $598.45 implies a valuation ratio of 32.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Aramark (ARMK)
Market Cap: $15.91 billion
From serving hot dogs at major league stadiums to managing college dining halls that feed thousands daily, Aramark (NYSE:ARMK) provides food services and facilities management to schools, healthcare facilities, businesses, sports venues, and correctional institutions across 16 countries.