3 Mid-Cap Stocks We Steer Clear Of

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.

GoDaddy (GDDY)

Market Cap: $11.54 billion

Known for its memorable Super Bowl commercials that put it on the map, GoDaddy (NYSE:GDDY) is a domain registrar and web services provider that helps entrepreneurs establish an online presence through domain registration, website building, hosting, and e-commerce tools.

Why Is GDDY Risky?

1. Average billings growth of 3.6% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
2. Estimated sales growth of 5.9% for the next 12 months implies demand will slow from its two-year trend
3. Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient

GoDaddy’s stock price of $86.70 implies a valuation ratio of 2.1x forward price-to-sales. Check out our free in-depth research report to learn more about why GDDY doesn’t pass our bar.

Amkor (AMKR)

Market Cap: $17.44 billion

Operating through a largely Asian facility footprint, Amkor Technologies (NASDAQ:AMKR) provides outsourced packaging and testing for semiconductors.

Why Do We Think AMKR Will Underperform?

1. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 11.3%
2. Gross margin of 14.3% reflects its high production costs
3. Low free cash flow margin of 2.9% declined over the last five years as its investments ramped, giving it little breathing room

Amkor is trading at $70.17 per share, or 32.8x forward P/E. Dive into our free research report to see why there are better opportunities than AMKR.

Royalty Pharma (RPRX)

Market Cap: $23.43 billion

Pioneering a unique business model in the pharmaceutical industry since 1996, Royalty Pharma (NASDAQ:RPRX) acquires rights to receive portions of sales from successful biopharmaceutical products, providing funding to drug developers without conducting research itself.

Why Are We Wary of RPRX?

1. Annual revenue growth of 2.1% over the last five years was below our standards for the healthcare sector
2. Modest revenue base of $2.44 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
3. 2.9 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

At $51.97 per share, Royalty Pharma trades at 10.2x forward P/E. If you’re considering RPRX for your portfolio, see our FREE research report to learn more.

Stocks We Like More

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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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.