2 Mid-Cap Stocks on Our Buy List and 1 Facing Challenges

Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations. However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie.

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 are two mid-cap stocks with massive growth potential and one that could be down big.

One Mid-Cap Stock to Sell:

A. O. Smith (AOS)

Market Cap: $10.17 billion

Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries.

Why Does AOS Worry Us?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 2.7% annually
3. Waning returns on capital imply its previous profit engines are losing steam

At $74.53 per share, A. O. Smith trades at 18.3x forward P/E. To fully understand why you should be careful with AOS, check out our full research report (it’s free).

Two Mid-Cap Stocks to Buy:

Bloom Energy (BE)

Market Cap: $15.74 billion

Working in stealth mode for eight years, Bloom Energy (NYSE:BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.

Why Are We Backing BE?

1. Annual revenue growth of 15.8% over the last five years was superb and indicates its market share increased during this cycle
2. Free cash flow turned positive over the last five years, showing the company is at an important crossroads
3. Returns on capital are increasing as management’s prior bets are starting to bear fruit

Bloom Energy is trading at $67.17 per share, or 112.5x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Synchrony Financial (SYF)

Market Cap: $28.04 billion

Powering over 73 million active accounts and partnerships with major brands like Amazon, PayPal, and Lowe's, Synchrony Financial (NYSE:SYF) provides credit cards, installment loans, and banking products through partnerships with retailers, healthcare providers, and digital platforms.

Why Do We Love SYF?

1. Share buybacks catapulted its annual earnings per share growth to 23.8%, which outperformed its revenue gains over the last five years
2. Annual tangible book value per share growth of 21.7% over the last two years was superb and indicates its capital strength increased during this cycle
3. Industry-leading 22.4% return on equity demonstrates management’s skill in finding high-return investments

Synchrony Financial’s stock price of $76 implies a valuation ratio of 8.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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