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.
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 pass on and some alternatives you should look into instead.
Verisk (VRSK)
Market Cap: $24.67 billion
Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ:VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.
Why Does VRSK Fall Short?
- 1.7% annual revenue growth over the last five years was slower than its business services peers
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 8% annually
Verisk is trading at $187.05 per share, or 22.9x forward P/E. Read our free research report to see why you should think twice about including VRSK in your portfolio.
SouthState (SSB)
Market Cap: $10.37 billion
With roots dating back to the Great Depression era of 1933, SouthState (NYSE:SSB) is a financial holding company that provides banking services, wealth management, and correspondent banking services across six southeastern states.
Why Do We Think Twice About SSB?
- Estimated net interest income growth of 3.3% for the next 12 months implies demand will slow from its five-year trend
- Projected 2.5 percentage point efficiency ratio increase over the next year signals its day-to-day expenses will rise
- Incremental sales over the last five years were less profitable as its 6.5% annual earnings per share growth lagged its revenue gains
At $106.98 per share, SouthState trades at 1.1x forward P/B. Check out our free in-depth research report to learn more about why SSB doesn’t pass our bar.
First Horizon (FHN)
Market Cap: $11.62 billion
Tracing its roots back to 1864 during the Civil War era, First Horizon (NYSE:FHN) is a Tennessee-based bank holding company that provides commercial and consumer banking, wealth management, and specialty financial services across multiple states.
Why Does FHN Fall Short?
- Net interest income trends were unexciting over the last five years as its 5.5% annual growth was below the typical banking firm
- Estimated net interest income growth of 2.6% for the next 12 months implies demand will slow from its five-year trend
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 2% annually
First Horizon’s stock price of $24.58 implies a valuation ratio of 1.3x forward P/B. To fully understand why you should be careful with FHN, check out our full research report (it’s free).
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.