3 Mid-Cap Stocks We Approach with Caution

Many investors pay attention to mid-cap stocks because they have established business models and expansive market opportunities. However, their paths to becoming $100 billion corporations are ripe with competition, ranging from giants with vast resources to agile upstarts eager to disrupt the status quo.

This is precisely where StockStory comes in – we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. That said, here are three mid-cap stocks to swipe left on and some alternatives you should look into instead.

Market Cap: $12.36 billion

Owner of Spongebob Squarepants and formerly known as ViacomCBS, Paramount Global (NASDAQ:PARA) is a major media conglomerate offering television, film production, and digital content across various global platforms.

Why Do We Think PSKY Will Underperform?

1. Sizable revenue base leads to growth challenges as its 3.2% annual revenue increases over the last five years fell short of other consumer discretionary companies

2. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 4.9 percentage points

3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Paramount’s stock price of $11.26 implies a valuation ratio of 13x forward P/E. Read our free research report to see why you should think twice about including PSKY in your portfolio, it’s free.

Market Cap: $20.59 billion

Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications.

Why Is IP Risky?

1. Annual sales growth of 3.9% over the last five years lagged behind its industrials peers as its large revenue base made it difficult to generate incremental demand

2. 7.4 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

3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

At $38.83 per share, International Paper trades at 23.1x forward P/E. If you’re considering IP for your portfolio, see our FREE research report to learn more.

Market Cap: $24.7 billion

Tracing its roots back to 1971 and operating in a region known as the “heart of Dixie,” Regions Financial (NYSE:RF) is a financial holding company that provides banking services, wealth management, and specialty financial solutions across the South, Midwest, and Texas.

Why Are We Cautious About RF?

1. Annual net interest income growth of 5.1% over the last five years was below our standards for the banking sector

2. 38.2 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position

3. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 2.2% annually

Regions Financial is trading at $28.24 per share, or 1.3x forward P/B. Dive into our free research report to see why there are better opportunities than RF.

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 6 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).

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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.