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. That said, here is one mid-cap stock with massive growth potential and two that could be down big.
Two Mid-Cap Stocks to Sell:
BJ's (BJ)
Market Cap: $11.98 billion
Appealing to the budget-conscious individual shopping for a household, BJ’s Wholesale Club (NYSE:BJ) is a membership-only retail chain that sells groceries, appliances, electronics, and household items, often in bulk quantities.
Why Does BJ Fall Short?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 18.4%
- Operating margin of 3.9% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
BJ’s stock price of $90.11 implies a valuation ratio of 20.4x forward P/E. If you’re considering BJ for your portfolio, see our FREE research report to learn more.
Elanco (ELAN)
Market Cap: $10.73 billion
Originally established as a division of pharmaceutical giant Eli Lilly before becoming independent in 2018, Elanco Animal Health (NYSE:ELAN) develops and sells medications, vaccines, and other health products for pets and farm animals across more than 90 countries.
Why Is ELAN Not Exciting?
- 2.5% annual revenue growth over the last two years was slower than its healthcare peers
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Push for growth has led to negative returns on capital, signaling value destruction
Elanco is trading at $21.72 per share, or 22.3x forward P/E. Read our free research report to see why you should think twice about including ELAN in your portfolio.
One Mid-Cap Stock to Watch:
Ulta (ULTA)
Market Cap: $23.4 billion
Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ:ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.
Why Are We Fans of ULTA?
- Fast expansion of new stores to reach markets with few or no locations is justified by its same-store sales growth
- ULTA is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- Industry-leading 32.1% return on capital demonstrates management’s skill in finding high-return investments
At $514 per share, Ulta trades at 20.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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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