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華爾街日報1 Mid-Cap Stock on Our Watchlist and 2 We Avoid
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.
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. Keeping that in mind, here is one mid-cap stock with massive growth potential and two that could be down big.
Two Mid-Cap Stocks to Sell:
F5 (FFIV)
Market Cap: $15.07 billion
Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 (NASDAQ:FFIV) provides security and delivery solutions that protect applications across cloud, data center, and edge environments for large organizations.
Why Does FFIV Worry Us?
- ARR has dropped by 12.3% over the last year, suggesting it lost long-term deals and renewals
- Estimated sales growth of 1.6% for the next 12 months implies demand will slow from its two-year trend
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
At $258.88 per share, F5 trades at 4.8x forward price-to-sales. If you’re considering FFIV for your portfolio, see our FREE research report to learn more.
Encompass Health (EHC)
Market Cap: $10.83 billion
With a network of 161 specialized facilities across 37 states and Puerto Rico, Encompass Health (NYSE:EHC) operates inpatient rehabilitation hospitals that help patients recover from strokes, hip fractures, and other debilitating conditions.
Why Are We Wary of EHC?
- Annual revenue growth of 4.7% over the last five years was below our standards for the healthcare sector
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 1.3 percentage points
Encompass Health is trading at $107.67 per share, or 19.1x forward P/E. Dive into our free research report to see why there are better opportunities than EHC.
One Mid-Cap Stock to Watch:
Toast (TOST)
Market Cap: $21.34 billion
Born from the frustrations of three friends waiting too long for their restaurant bill, Toast (NYSE:TOST) provides a cloud-based digital technology platform with software, payment processing, and hardware solutions built specifically for restaurants.
Why Are We Fans of TOST?
- Ability to secure long-term commitments with customers is evident in its 31.3% ARR growth over the last year
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
Toast’s stock price of $36.27 implies a valuation ratio of 3.1x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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