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 a long growth runway and two best left ignored.
Two Mid-Cap Stocks to Sell:
Twilio (TWLO)
Market Cap: $27.83 billion
Known for the clever "Twilio Magic" demo that had developers creating functioning communications apps in minutes, Twilio (NYSE: TWLO) provides a platform that enables businesses to communicate with their customers through voice, messaging, email, and other digital channels.
Why Do We Think Twice About TWLO?
- Customers generally do not adopt complementary products as its 110% net revenue retention rate lags behind the industry standard
- Gross margin of 48.7% is way below its competitors, leaving less money to invest in areas like marketing and R&D
- Operating margin improvement of 4.3 percentage points over the last year demonstrates its ability to scale efficiently
At $182.98 per share, Twilio trades at 5.2x forward price-to-sales. To fully understand why you should be careful with TWLO, check out our full research report (it’s free).
Advanced Drainage (WMS)
Market Cap: $10.86 billion
Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE: WMS) provides clean water management solutions to communities across America.
Why Does WMS Fall Short?
- Muted 3% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Earnings per share have dipped by 1.8% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Eroding returns on capital suggest its historical profit centers are aging
Advanced Drainage’s stock price of $141.72 implies a valuation ratio of 22.3x forward P/E. Dive into our free research report to see why there are better opportunities than WMS.
One Mid-Cap Stock to Buy:
SoFi (SOFI)
Market Cap: $21.9 billion
Starting as a student loan refinancing company founded by Stanford business school students in 2011, SoFi Technologies (NASDAQ: SOFI) operates a digital financial platform offering lending, banking, investing, and other financial services to help members borrow, save, spend, invest, and protect their money.
Why Is SOFI a Good Business?
- Annual revenue growth of 33.4% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 396% over the last two years outstripped its revenue performance
SoFi is trading at $17.06 per share, or 27.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
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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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
