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 a long growth runway and two best left ignored.
Market Cap: $13.88 billion
Founded in 2002 by Niraj Shah, Wayfair (NYSE:W) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.
Why Are We Cautious About W?
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Struggled with new customer acquisition as its active customers averaged 1.8% declines
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Anticipated sales growth of 5.2% for the next year implies demand will be shaky
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Gross margin of 30.2% reflects its high servicing costs
At $106.34 per share, Wayfair trades at 18.4x forward EV/EBITDA. Check out our free in-depth research report to learn more about why W doesn’t pass our bar.
Market Cap: $12.25 billion
Serving as the crucial middleman in the technology supply chain, TD SYNNEX (NYSE:SNX) is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions.
Why Does SNX Fall Short?
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Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 1.3% over the last two years was below our standards for the business services sector
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Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
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Poor free cash flow margin of 1.2% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
TD SYNNEX’s stock price of $150.43 implies a valuation ratio of 10.8x forward P/E. If you’re considering SNX for your portfolio, see our FREE research report to learn more.
Market Cap: $23.48 billion
Founded in 1996 as one of the pioneers in electronic bond trading, Tradeweb Markets (NASDAQ:TW) builds and operates electronic marketplaces that connect financial institutions for trading across rates, credit, equities, and money markets.
Why Do We Love TW?
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Market share has increased this cycle as its 25.8% annual revenue growth over the last two years was exceptional
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Earnings growth has trumped its peers over the last two years as its EPS has compounded at 25.7% annually
