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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one mid-cap stock with huge upside potential and two that could be down big.
Two Mid-Cap Stocks to Sell:
Yum China (YUMC)
Market Cap: $14.45 billion
One of China’s largest restaurant companies, Yum China (NYSE: YUMC) is an independent entity spun off from Yum! Brands in 2016.
Why Does YUMC Give Us Pause?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 5.2% over the last seven years was below our standards for the restaurant sector
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Lacking pricing power results in an inferior gross margin of 20.3% that must be offset by turning more tables
At $42.96 per share, Yum China trades at 14.2x forward P/E. Check out our free in-depth research report to learn more about why YUMC doesn’t pass our bar.
Regal Rexnord (RRX)
Market Cap: $13.43 billion
Headquartered in Milwaukee, Regal Rexnord (NYSE: RRX) provides power transmission and industrial automation products.
Why Is RRX Not Exciting?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4% annually
- ROIC of 4.1% reflects management’s challenges in identifying attractive investment opportunities
Regal Rexnord’s stock price of $196.73 implies a valuation ratio of 17.9x forward P/E. To fully understand why you should be careful with RRX, check out our full research report (it’s free).
One Mid-Cap Stock to Buy:
Expand Energy (EXE)
Market Cap: $22.24 billion
Rebranded from Chesapeake Energy in 2024 after emerging from bankruptcy, Expand Energy (NASDAQ: EXE) produces natural gas, oil, and natural gas liquids from underground shale formations in Louisiana, Pennsylvania, Ohio, and West Virginia.
Why Will EXE Outperform?
- Market share has increased this cycle as its 23.8% annual revenue growth over the last five years was exceptional
- Unparalleled revenue scale of $12.96 billion gives it advantageous pricing and terms with suppliers
- EBITDA margin expanded by 43.6 percentage points over the last five years as it scaled and became more efficient
Expand Energy is trading at $93.07 per share, or 11.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.