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.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. That said, here is one mid-cap stock with massive growth potential and two that could be down big.
Two Mid-Cap Stocks to Sell:
Williams-Sonoma (WSM)
Market Cap: $19.73 billion
Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE: WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.
Why Does WSM Fall Short?
- Ongoing store closures and lackluster same-store sales indicate sluggish demand and a focus on consolidation
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Free cash flow margin dropped by 5.3 percentage points over the last year, implying the company became more capital intensive as competition picked up
Williams-Sonoma’s stock price of $160.44 implies a valuation ratio of 18.8x forward P/E. Check out our free in-depth research report to learn more about why WSM doesn’t pass our bar.
Clean Harbors (CLH)
Market Cap: $12.13 billion
Established in 1980, Clean Harbors (NYSE: CLH) provides environmental and industrial services like hazardous and non-hazardous waste disposal and emergency spill cleanups.
Why Are We Wary of CLH?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Earnings per share have dipped by 2.5% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- 5.3 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
At $226.34 per share, Clean Harbors trades at 28.5x forward P/E. Read our free research report to see why you should think twice about including CLH in your portfolio.
One Mid-Cap Stock to Buy:
Texas Roadhouse (TXRH)
Market Cap: $12.8 billion
With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ: TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.
Why Is TXRH a Good Business?
- Aggressive strategy of rolling out new restaurants to gobble up whitespace is prudent given its same-store sales growth
- Customers are lining up to eat at its restaurants as the company’s same-store sales growth averaged 7.9% over the past two years
- ROIC punches in at 18.7%, illustrating management’s expertise in identifying profitable investments, and its rising returns show it’s making even more lucrative bets
Texas Roadhouse is trading at $193.37 per share, or 27.3x 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
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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-small-cap company Comfort Systems (+782% 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
