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 a long growth runway and two that could be down big.
Two Mid-Cap Stocks to Sell:
Paramount (PSKY)
Market Cap: $18.33 billion
Owner of Spongebob Squarepants and formerly known as ViacomCBS, Paramount Global (NASDAQ: PARA) is a major media conglomerate offering television, film production, and digital content across various global platforms.
Why Do We Steer Clear of PSKY?
- Products and services aren't resonating with the market as its revenue declined by 2% annually over the last two years
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 15% annually
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $16.70 per share, Paramount trades at 16.9x forward P/E. To fully understand why you should be careful with PSKY, check out our full research report (it’s free for active Edge members).
FactSet (FDS)
Market Cap: $10.69 billion
Founded in 1978 when financial data was still primarily delivered through paper reports, FactSet (NYSE: FDS) provides financial data, analytics, and technology solutions that investment professionals use to research, analyze, and manage their portfolios.
Why Do We Think Twice About FDS?
- Muted 5.5% annual revenue growth over the last two years shows its demand lagged behind its financials peers
- Earnings per share lagged its peers over the last two years as they only grew by 8.1% annually
FactSet’s stock price of $285.30 implies a valuation ratio of 16.4x forward P/E. Read our free research report to see why you should think twice about including FDS in your portfolio.
One Mid-Cap Stock to Buy:
Duolingo (DUOL)
Market Cap: $14.3 billion
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ: DUOL) is a mobile app helping people learn new languages.
Why Should You Buy DUOL?
- Monthly Active Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 311% over the last three years outstripped its revenue performance
- DUOL is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
Duolingo is trading at $311.63 per share, or 44.5x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. 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 Kadant (+351% 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
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