Mid-cap stocks have the best odds of scaling into $100 billion corporations thanks to their tested business models and large addressable markets. But the many opportunities in front of them attract significant competition, spanning from industry behemoths with seemingly infinite resources to small, nimble players with chips on their shoulders.
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. That said, here are two mid-cap stocks with massive growth potential and one that may have trouble.
One Mid-Cap Stock to Sell:
Service International (SCI)
Market Cap: $11.37 billion
Founded in 1962, Service International (NYSE: SCI) is a leading provider of death care products and services in North America.
Why Do We Think SCI Will Underperform?
- Number of funeral services performed has disappointed over the past two years, indicating weak demand for its offerings
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 14.7% for the last two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $83.39 per share, Service International trades at 19.2x forward P/E. Dive into our free research report to see why there are better opportunities than SCI.
Two Mid-Cap Stocks to Buy:
Pinterest (PINS)
Market Cap: $13.8 billion
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Why Will PINS Outperform?
- Has the opportunity to boost monetization through new features and premium offerings as its monthly active users have grown by 11% annually over the last two years
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 36.4% annually, topping its revenue gains
- Robust free cash flow margin of 27.5% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
Pinterest’s stock price of $24.30 implies a valuation ratio of 17.3x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
SEI Investments (SEIC)
Market Cap: $12.57 billion
Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ:SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.
Why Is SEIC a Good Business?
- Products and services resonate with customers, evidenced by its respectable 10.9% annualized sales growth over the last two years
- Share repurchases over the last two years enabled its annual earnings per share growth of 22.1% to outpace its revenue gains
- ROE punches in at 26.5%, illustrating management’s expertise in identifying profitable investments
SEI Investments is trading at $103.50 per share, or 15.9x 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
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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.