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.
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 are three mid-cap stocks to swipe left on and some alternatives you should look into instead.
Warner Music Group (WMG)
Market Cap: $17.04 billion
Launching the careers of legendary artists like Frank Sinatra, Warner Music Group (NASDAQ: WMG) is a music company managing a diverse portfolio of artists, recordings, and music publishing services worldwide.
Why Is WMG Not Exciting?
- Annual revenue growth of 4.3% over the last two years was below our standards for the consumer discretionary sector
- Anticipated sales growth of 4.9% for the next year implies demand will be shaky
- Underwhelming 14.1% return on capital reflects management’s difficulties in finding profitable growth opportunities
Warner Music Group’s stock price of $32.69 implies a valuation ratio of 25.7x forward P/E. Dive into our free research report to see why there are better opportunities than WMG.
Hologic (HOLX)
Market Cap: $14.85 billion
As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ: HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.
Why Are We Cautious About HOLX?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 23.6 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $66.51 per share, Hologic trades at 15.3x forward P/E. Check out our free in-depth research report to learn more about why HOLX doesn’t pass our bar.
FactSet (FDS)
Market Cap: $14.03 billion
Founded in 1978 when financial data was still primarily delivered through paper reports, FactSet (NYSE: FDS) provides financial data, analytics, and technology solutions that investment professionals use to research, analyze, and manage their portfolios.
Why Are We Wary of FDS?
- 5.6% annual revenue growth over the last two years was slower than its financials peers
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 6.4% annually
FactSet is trading at $371.01 per share, or 20.8x forward P/E. To fully understand why you should be careful with FDS, check out our full research report (it’s free).
Stocks We Like More
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