1 Mid-Cap Stock with Impressive Fundamentals and 2 We Brush Off

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.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here is one mid-cap stock with massive growth potential and two that may have trouble.

Two Mid-Cap Stocks to Sell:

Equitable Holdings (EQH)

Market Cap: $11.77 billion

Tracing its roots back to 1859 as one of America's oldest financial institutions, Equitable Holdings (NYSE:EQH) provides retirement planning, asset management, and life insurance products through its two main franchises, Equitable and AllianceBernstein.

Why Do We Think EQH Will Underperform?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 2.2% for the last five years
2. Efficiency has decreased over the last two years as its pre-tax profit margin fell by 13.3 percentage points

Equitable Holdings is trading at $41.90 per share, or 5.8x forward P/E. If you’re considering EQH for your portfolio, see our FREE research report to learn more.

US Foods (USFD)

Market Cap: $19.78 billion

With a fleet of over 6,500 trucks delivering everything from fresh produce to frozen entrées, US Foods (NYSE:USFD) is a major foodservice distributor that supplies food products and services to approximately 250,000 restaurants, healthcare facilities, hotels, and educational institutions across the United States.

Why Do We Avoid USFD?

1. Average unit sales growth of 2.8% over the past two years reflects steady demand for its products
2. Subpar operating margin of 3% constrains its ability to invest in process improvements or effectively respond to new competitive threats
3. Low free cash flow margin of 2.3% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

At $89.80 per share, US Foods trades at 18.9x forward P/E. Check out our free in-depth research report to learn more about why USFD doesn’t pass our bar.

One Mid-Cap Stock to Buy:

Rollins (ROL)

Market Cap: $26.26 billion

Operating under multiple brands like Orkin and HomeTeam Pest Defense, Rollins (NYSE:ROL) provides pest and wildlife control services to residential and commercial customers.

Why Is ROL a Good Business?

1. Annual revenue growth of 11.7% over the last five years was superb and indicates its market share increased during this cycle
2. Offerings are mission-critical for businesses and result in a best-in-class gross margin of 52.3%
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute

Rollins’s stock price of $54.30 implies a valuation ratio of 43.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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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.