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 are two mid-cap stocks with long growth runways and one that may have trouble.
One Mid-Cap Stock to Sell:
Unity (U)
Market Cap: $19.31 billion
Powering over half of the world's mobile games and expanding into industries from automotive to architecture, Unity (NYSE:U) provides software tools and services that allow developers to create, run, and monetize interactive 2D and 3D content across multiple platforms.
Why Does U Worry Us?
- Sales were flat over the last two years, indicating it’s failed to expand its business
- Products, pricing, or go-to-market strategy may need some adjustments as its 12.3% average billings growth over the last year was weak
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 2.4 percentage points
Unity’s stock price of $43.85 implies a valuation ratio of 7.8x forward price-to-sales. To fully understand why you should be careful with U, check out our full research report (it’s free).
Two Mid-Cap Stocks to Watch:
Lincoln Electric (LECO)
Market Cap: $15.49 billion
Headquartered in Ohio, Lincoln Electric (NASDAQ:LECO) manufactures and sells welding equipment for various industries.
Why Are We Positive on LECO?
- Healthy operating margin of 16.5% shows it’s a well-run company with efficient processes, and its rise over the last five years was fueled by some leverage on its fixed costs
- Free cash flow margin increased by 3.8 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $284.08 per share, Lincoln Electric trades at 23.1x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Leidos (LDOS)
Market Cap: $17.68 billion
Formed through the split of IT services company SAIC, Leidos (NYSE:LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.
Why Do We Like LDOS?
- Backlog has averaged 15.9% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Share repurchases over the last two years enabled its annual earnings per share growth of 16.8% to outpace its revenue gains
- Free cash flow margin jumped by 6.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Leidos is trading at $140.45 per share, or 11.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.