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. Keeping that in mind, here is one mid-cap stock with huge upside potential and two that may have trouble.
Two Mid-Cap Stocks to Sell:
Service International (SCI)
Market Cap: $10.94 billion
Founded in 1962, Service International (NYSE: SCI) is a leading provider of death care products and services in North America.
Why Does SCI Fall Short?
- Performance surrounding its funeral services performed has lagged its peers
- Anticipated sales growth of 3% for the next year implies demand will be shaky
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $78.02 per share, Service International trades at 19.8x forward P/E. If you’re considering SCI for your portfolio, see our FREE research report to learn more.
Flex (FLEX)
Market Cap: $20.15 billion
Originally known as Flextronics until its 2016 rebranding, Flex (NASDAQ: FLEX) is a global manufacturing partner that designs, engineers, and builds products for companies across industries from medical devices to solar trackers.
Why Do We Think Twice About FLEX?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.2% annually over the last two years
- Estimated sales growth of 2.8% for the next 12 months is soft and implies weaker demand
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2.7% for the last five years
Flex’s stock price of $53 implies a valuation ratio of 12.5x forward EV-to-EBITDA. To fully understand why you should be careful with FLEX, check out our full research report (it’s free).
One Mid-Cap Stock to Buy:
Super Micro (SMCI)
Market Cap: $23.83 billion
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Is SMCI a Good Business?
- Annual revenue growth of 75.6% over the past two years was outstanding, reflecting market share gains this cycle
- Massive revenue base of $21.97 billion makes it a well-known name that influences purchasing decisions
- Free cash flow flipped to positive over the last five years, indicating the company has achieved financial self-sustainability
Super Micro is trading at $40.08 per share, or 14.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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 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 Exlservice (+354% 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
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