Many investors pay attention to mid-cap stocks because they have established business models and expansive market opportunities. However, their paths to becoming $100 billion corporations are ripe with competition, ranging from giants with vast resources to agile upstarts eager to disrupt the status quo.
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. Keeping that in mind, here are three mid-cap stocks to pass on and some alternatives you should look into instead.
Rivian (RIVN)
Market Cap: $22.04 billion
The manufacturer of Amazon’s delivery trucks, Rivian (NASDAQ: RIVN) designs, manufactures, and sells electric vehicles and commercial delivery vans.
Why Are We Hesitant About RIVN?
- Declining vehicles delivered show it’s struggled to move its products and might have to lower prices to stimulate growth
- Negative free cash flow raises questions about the return timeline for its investments
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $15.38 per share, Rivian trades at 2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than RIVN.
The Ensign Group (ENSG)
Market Cap: $10.3 billion
Founded in 1999 and named after a naval term for a flag-bearing ship, The Ensign Group (NASDAQ: ENSG) operates skilled nursing facilities, senior living communities, and rehabilitation services across 15 states, primarily serving high-acuity patients recovering from various medical conditions.
Why Do We Think Twice About ENSG?
- Declining unit sales over the past two years imply it may need to invest in improvements to get back on track
- Free cash flow margin has shown no improvement over the last five years
- Shrinking returns on capital suggest that increasing competition may be pressuring the company’s profitability
The Ensign Group’s stock price of $178.16 implies a valuation ratio of 21.7x forward P/E. Check out our free in-depth research report to learn more about why ENSG doesn’t pass our bar.
Globe Life (GL)
Market Cap: $14.15 billion
With roots dating back to 1900 and a rebranding from Torchmark Corporation in 2019, Globe Life (NYSE: GL) is an insurance holding company that offers life insurance, supplemental health insurance, and annuity products through various distribution channels.
Why Does GL Fall Short?
- Muted 4.5% annual revenue growth over the last two years shows its demand lagged behind its insurance peers
- Net premiums earned expanded by 5% annually over the last five years, falling below our expectations for the insurance sector
- Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 1.5% annually over the last five years
Globe Life is trading at $182.73 per share, or 2.2x forward P/B. Read our free research report to see why you should think twice about including GL in your portfolio.
Stocks We Like More
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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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
