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. That said, here are two mid-cap stocks with massive growth potential and one that may have trouble.
One Mid-Cap Stock to Sell:
Jacobs Solutions (J)
Market Cap: $15.21 billion
With a workforce of approximately 45,000 professionals tackling complex challenges from water scarcity to cybersecurity, Jacobs Solutions (NYSE: J) provides engineering, consulting, and technical services focused on infrastructure, sustainability, and advanced technology solutions.
Why Do We Pass on J?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 5.4% annually over the last five years
- Earnings per share have dipped by 8.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $130.10 per share, Jacobs Solutions trades at 18x forward P/E. To fully understand why you should be careful with J, check out our full research report (it’s free).
Two Mid-Cap Stocks to Watch:
Confluent (CFLT)
Market Cap: $10.98 billion
Built by the original creators of Apache Kafka, the popular open-source messaging system, Confluent (NASDAQ: CFLT) provides a data infrastructure platform that enables organizations to connect their applications, systems, and data layers around real-time data streams.
Why Are We Fans of CFLT?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 24.2% over the last year
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Gross margin of 74.3% is reasonable for the industry and allows for steady investments in marketing and R&D
Confluent is trading at $30.70 per share, or 7.9x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Roku (ROKU)
Market Cap: $13.98 billion
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Why Are We Backing ROKU?
- Total Hours Streamed have grown by 18,380% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Grip over its ecosystem is highlighted by its ability to grow engagement while increasing the average revenue per user by 104% annually
- Free cash flow margin increased by 14.9 percentage points over the last few years, giving the company more capital to invest or return to shareholders
Roku’s stock price of $94.68 implies a valuation ratio of 21x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
