Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations. However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are two mid-cap stocks with long growth runways and one that could be down big.
One Mid-Cap Stock to Sell:
International Paper (IP)
Market Cap: $23.24 billion
Established in 1898, International Paper (NYSE: IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications.
Why Do We Pass on IP?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 2.1% annually over the last five years
- 11.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
International Paper is trading at $43.88 per share, or 6.6x forward EV-to-EBITDA. To fully understand why you should be careful with IP, check out our full research report (it’s free).
Two Mid-Cap Stocks to Watch:
CAVA (CAVA)
Market Cap: $10.84 billion
Starting from a single Washington, D.C. location, CAVA (NYSE: CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Why Should CAVA Be on Your Watchlist?
- Customers are lining up to eat at its restaurants as the company’s same-store sales growth averaged 16% over the past two years
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 69.2% annually, topping its revenue gains
- Free cash flow margin grew by 11.2 percentage points over the last year, giving the company more chips to play with
At $94 per share, CAVA trades at 157.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
FTAI Aviation (FTAI)
Market Cap: $11.28 billion
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ: FTAI) sells, leases, maintains, and repairs aircraft engines.
Why Is FTAI a Top Pick?
- Annual revenue growth of 44.9% over the past two years was outstanding, reflecting market share gains this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 73.8% outpaced its revenue gains
- Cash burn has become less severe over the last five years, showing the company is making some progress toward financial sustainability
FTAI Aviation’s stock price of $108.90 implies a valuation ratio of 19.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
