2 Mid-Cap Stocks with Solid Fundamentals and 1 Facing Headwinds

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.

These dynamics can rattle even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. That said, here are two mid-cap stocks with massive growth potential and one that could be down big.

One Mid-Cap Stock to Sell:

Ally Financial (ALLY)

Market Cap: $13.38 billion

Born from the former GMAC (General Motors Acceptance Corporation) and rebranded in 2010, Ally Financial (NYSE:ALLY) operates a digital-first bank offering auto financing, insurance, mortgage lending, and investment services to consumers and commercial clients.

Why Do We Steer Clear of ALLY?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 3.8% annually over the last two years
2. Sales were less profitable over the last two years as its earnings per share fell by 8.9% annually, worse than its revenue declines
3. Tier one capital ratio of 9.6% is insufficient to meet regulatory requirements, increasing the probability of government intervention

Ally Financial’s stock price of $43.13 implies a valuation ratio of 9.5x forward P/E. Check out our free in-depth research report to learn more about why ALLY doesn’t pass our bar.

Two Mid-Cap Stocks to Watch:

HubSpot (HUBS)

Market Cap: $27.56 billion

Born from the idea that traditional interruptive marketing was becoming less effective, HubSpot (NYSE:HUBS) provides an integrated platform that helps businesses attract, engage, and manage customer relationships through marketing, sales, service, and content management tools.

Why Are We Fans of HUBS?

1. Average billings growth of 21.3% over the last year enhances its liquidity and shows there is steady demand for its products
2. Estimated revenue growth of 16.9% for the next 12 months implies its momentum over the last two years will continue
3. Prominent and differentiated software culminates in a stellar gross margin of 84.6%

At $522.75 per share, HubSpot trades at 8.3x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.

Deckers (DECK)

Market Cap: $16.8 billion

Established in 1973, Deckers (NYSE:DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.

Why Could DECK Be a Winner?

1. Average constant currency growth of 18% over the past two years demonstrates its ability to grow internationally despite currency fluctuations
2. Free cash flow margin is on track to jump by 2.3 percentage points next year, meaning the company will have more resources to pursue growth initiatives, repurchase shares, or pay dividends
3. Returns on capital are climbing as management makes more lucrative bets

Deckers is trading at $113.39 per share, or 18.7x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-micro-cap company Tecnoglass (+1,754% 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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