3 Mid-Cap Stocks That Concern Us

Mid-cap stocks have the best odds of scaling into $100 billion corporations thanks to their tested business models and large addressable markets. But the many opportunities in front of them attract significant competition, spanning from industry behemoths with seemingly infinite resources to small, nimble players with chips on their shoulders.

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. Keeping that in mind, here are three mid-cap stocks to swipe left on and some alternatives you should look into instead.

Kraft Heinz (KHC)

Market Cap: $29.54 billion

The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ:KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.

Why Should You Sell KHC?

1. Declining unit sales over the past two years imply it may need to invest in product improvements to get back on track
2. Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 34.6 percentage points
3. Underwhelming 1.2% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam

At $25.01 per share, Kraft Heinz trades at 10x forward P/E. If you’re considering KHC for your portfolio, see our FREE research report to learn more.

Rocket Lab (RKLB)

Market Cap: $24.17 billion

Becoming the first private company in the Southern Hemisphere to reach space, Rocket Lab (NASDAQ:RKLB) offers rockets designed for launching small satellites.

Why Are We Wary of RKLB?

1. Suboptimal cost structure is highlighted by its history of operating margin losses
2. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
3. Cash burn makes us question whether it can achieve sustainable long-term growth

Rocket Lab’s stock price of $45.25 implies a valuation ratio of 33.9x forward price-to-sales. Read our free research report to see why you should think twice about including RKLB in your portfolio.

Guardant Health (GH)

Market Cap: $11.86 billion

Pioneering the field of "liquid biopsy" with technology that can identify cancer-specific genetic mutations from a simple blood draw, Guardant Health (NASDAQ:GH) develops blood tests that detect and monitor cancer by analyzing tumor DNA in the bloodstream, helping doctors make treatment decisions without invasive biopsies.

Why Do We Think Twice About GH?

1. Revenue growth over the past five years was nullified by the company’s new share issuances as its earnings per share fell by 18.5% annually
2. Negative free cash flow raises questions about the return timeline for its investments
3. Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes

Guardant Health is trading at $94.10 per share, or 10.6x forward price-to-sales. Dive into our free research report to see why there are better opportunities than GH.

Stocks We Like More

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 5 Strong Momentum 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-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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.