1 Mid-Cap Stock with Solid Fundamentals and 2 to Question
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.
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 that may have trouble.
Market Cap: $24.7 billion
Named after its founder, who was an entrepreneurial woman from New York with a passion for skincare, Estée Lauder (NYSE:EL) is a one-stop beauty shop with products in skincare, fragrance, makeup, sun protection, and men's grooming.
Why Do We Pass on EL?
Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
Overall productivity fell over the last year as its plummeting sales were accompanied by a decline in its operating margin
Sales were less profitable over the last three years as its earnings per share fell by 35.3% annually, worse than its revenue declines
Estée Lauder's stock price of $68.60 implies a valuation ratio of 31.5x forward P/E. To fully understand why you should be careful with EL, check out our full research report (it's free).
Market Cap: $14.15 billion
Founded in 1926, Graco (NYSE:GGG) is an industrial company specializing in the development and manufacturing of fluid-handling systems and products.
Why Do We Think Twice About GGG?
Flat sales over the last two years suggest it must find different ways to grow during this cycle
Flat earnings per share over the last two years underperformed the sector average
Eroding returns on capital suggest its historical profit centers are aging
Graco is trading at $84.67 per share, or 28x forward P/E. Check out our free in-depth research report to learn more about why GGG doesn't pass our bar.
Market Cap: $21.02 billion
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Why Could PINS Be a Winner?
Has the opportunity to boost monetization through new features and premium offerings as its monthly active users have grown by 10.4% annually over the last two years
Healthy EBITDA margin of 27% shows it's a well-run company with efficient processes
PINS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $30.98 per share, Pinterest trades at 17.1x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it's free.
Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
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