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 huge upside potential and one that could be down big.
One Mid-Cap Stock to Sell:
Cognex (CGNX)
Market Cap: $10.25 billion
Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ:CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.
Why Are We Hesitant About CGNX?
- Muted 2.1% annual revenue growth over the last five years shows its demand lagged behind its business services peers
- Earnings per share have contracted by 2.5% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Eroding returns on capital suggest its historical profit centers are aging
Cognex is trading at $60.45 per share, or 32.8x forward P/E. Dive into our free research report to see why there are better opportunities than CGNX.
Two Mid-Cap Stocks to Watch:
Restaurant Brands (QSR)
Market Cap: $24.64 billion
Formed through a strategic merger, Restaurant Brands International (NYSE:QSR) is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.
Why Does QSR Stand Out?
- Same-store sales provide a solid foundation for the steady expansion of its restaurants
- Excellent operating margin of 25.2% highlights the efficiency of its business model, and its rise over the last year was fueled by some leverage on its fixed costs
- Robust free cash flow margin of 15.9% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
At $70.48 per share, Restaurant Brands trades at 16.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Hubbell (HUBB)
Market Cap: $25.12 billion
A respected player in the electrical segment, Hubbell (NYSE:HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Why Do We Love HUBB?
- Solid 9.8% annual revenue growth over the last five years indicates its offerings solve complex business issues
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin grew by 5.8 percentage points over the last five years, giving the company more chips to play with
Hubbell’s stock price of $477.50 implies a valuation ratio of 21.8x 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
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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.