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.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. 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:
TopBuild (BLD)
Market Cap: $11.31 billion
Established in 2015 following a spinoff from Masco Corporation, TopBuild (NYSE:BLD) is a distributor and installer of insulation and other building products.
Why Does BLD Give Us Pause?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Anticipated sales growth of 2.7% for the next year implies demand will be shaky
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 5% annually
TopBuild’s stock price of $405 implies a valuation ratio of 19.4x forward P/E. Read our free research report to see why you should think twice about including BLD in your portfolio.
SS&C (SSNC)
Market Cap: $21.04 billion
Founded in 1986 as a bridge between technology and financial services, SS&C Technologies (NASDAQ:SSNC) provides software and software-enabled services that help financial firms and healthcare organizations automate complex business processes.
Why Does SSNC Fall Short?
- Earnings per share lagged its peers over the last five years as they only grew by 7.1% annually
- 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Underwhelming 6.4% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $85.75 per share, SS&C trades at 13.9x forward P/E. Check out our free in-depth research report to learn more about why SSNC doesn’t pass our bar.
One Mid-Cap Stock to Buy:
Rollins (ROL)
Market Cap: $28.27 billion
Operating under multiple brands like Orkin and HomeTeam Pest Defense, Rollins (NYSE:ROL) provides pest and wildlife control services to residential and commercial customers.
Why Are We Backing ROL?
- Impressive 11.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Offerings are mission-critical for businesses and result in a best-in-class gross margin of 52.2%
- ROL is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Rollins is trading at $58.33 per share, or 50x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Trump’s April 2024 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 6 Stocks for this week. 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 Comfort Systems (+782% 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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