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. Keeping that in mind, here are three mid-cap stocks to avoid and some other investments you should consider instead.
GoDaddy (GDDY)
Market Cap: $16.87 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 Should You Dump GDDY?
- New contracts were hard to come by as its average bookings growth of 7.8% over the last year underwhelmed
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 6.5%
- High servicing costs result in a relatively inferior gross margin of 63.6% that must be offset through increased usage
GoDaddy is trading at $124.85 per share, or 3.4x forward price-to-sales. Read our free research report to see why you should think twice about including GDDY in your portfolio.
Tapestry (TPR)
Market Cap: $25.21 billion
Originally founded as Coach, Tapestry (NYSE:TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.
Why Do We Steer Clear of TPR?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Subpar operating margin of 11.8% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $123.28 per share, Tapestry trades at 22.1x forward P/E. To fully understand why you should be careful with TPR, check out our full research report (it’s free for active Edge members).
JLL (JLL)
Market Cap: $15.79 billion
Founded in 1999 through the merger of Jones Lang Wootton and LaSalle Partners, JLL (NYSE:JLL) is a company specializing in real estate advisory and investment management services.
Why Are We Out on JLL?
- Sizable revenue base leads to growth challenges as its 8.1% annual revenue increases over the last five years fell short of other consumer discretionary companies
- Low free cash flow margin of 2.8% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
JLL’s stock price of $340.71 implies a valuation ratio of 17.2x forward P/E. If you’re considering JLL for your portfolio, see our FREE research report to learn more.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 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
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