In the world of mid-cap stocks, companies with a market cap between $2 billion and $10 billion are gaining attention on Wall Street as the next frontier for growth. These companies often have more flexibility and adaptability than large-cap stocks. However, in the tech sector, the mid-cap’s agility and robust products make it an appealing opportunity to investors.
Below I have highlighted three mid-cap tech stocks: Open Text Corporation (OTEX), Informatica Inc. (INFA), and UiPath Inc. (PATH), which have more than 10% upside potential.
With Trump’s victory and return to the White House for the second time, it is anticipated that the technology sector will benefit as it did in Trump’s first term, helped by the administration’s tax policies.
Trump’s campaign has already hinted at plans to review the AI Executive Order and suggested strengthening the nation’s AI infrastructure, fostering an innovation-friendly environment for national security and economic dominance.
Furthermore, tech companies have been benefitting from emerging trends, especially in fields such as cloud computing, cybersecurity, and artificial intelligence. Technology stocks have been outperforming the broader S&P 500, with Information technology stocks being the largest sector, comprising 32% of the S&P 500 Index.
Additionally, mid-cap tech companies generally exhibit higher volatility, which means they can deliver significant returns if timed well, albeit with some inherent risks. Its growth is also being spurred by increased investor interest as these stocks often trade at a more accessible price point than large-cap tech, making it more appealing.
With that in mind, let’s dig deeper into the fundamentals of the above-mentioned mid-cap stocks in detail:
Open Text Corporation (OTEX)
Headquartered in Waterloo, Canada, with a market cap of $8.12 billion, OTEX provides information management products and services. It provides software solutions and content services, including content collaboration and intelligent capture to records management, collaboration, e-signatures, and archiving.
On October 21, OTEX announced a strategic partnership with Cork Inc. to add cyber warranty solutions and provide a holistic solution portfolio tailored specifically for Small and Medium Businesses (SMBs) and Managed Service Providers (MSPs). This collaboration empowers MSPs with financial protection, increased revenue streams, and improved client retention while reducing costs.
On September 5, OTEX announced a partnership with Nippon Gases Deutschland, the German business unit of Nippon Sanso Holdings Corporation (NSHD). This partnership enables Nippon to effectively manage the complexities of evolving e-invoicing mandates in Germany through OTEX’s advanced cloud-based solutions.
For the first quarter of 2025, which ended on September 30, OTEX’s total revenues stood at $1.27 billion, while its Cloud services and subscriptions segment reported a total revenue of $457.02 million, up marginally year-over-year.
In addition, the company’s attributable net income stood at $84.42 million, indicating a 4.3% growth from the prior-year quarter period, while its earnings per share came in at $0.32, up 6.7% year-over-year.
Analysts expect OTEX’s revenue and EPS for the current year (ending June 2025) to be $5.31 billion and $3.66, respectively. For the fiscal year 2026, its revenue and EPS are expected to grow by 2.4% and 13.5% from the prior year to $5.44 billion and $4.15, respectively.
OTEX shares have surged 2.4% over the past three months to close the last trading session at $30.49.
OTEX’s Wall Street analyst-given 12-month median price target of $34.17 indicates a 12.1% upside potential from the last closing price. The price targets range from a low of $32 to a high of $38.
OTEX’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
OTEX has an A grade for Value and a B for Growth. It is ranked #16 out of 129 stocks in the Software - Application industry. Click here to see the additional ratings for OTEX (Momentum, Stability, Sentiment, and Quality).
Informatica Inc. (INFA)
With a market cap of $7.78 billion, INFA is an enterprise cloud data management company that develops an artificial intelligence-powered platform that connects, manages, and unifies data across multi-vendor, multi-cloud, and hybrid systems at enterprise scale internationally.
On November 12, INFA announced the expansion of the GenAI-powered data management assistant, CLAIRE® GPT, in Europe and the Asia Pacific (APAC) regions, followed by its launch in North America this year.
This expansion will enable customers more flexibility and accessibility to leverage GenAI-powered data management capabilities. It will also allow INFA to set its footprint in the Asia Pacific region.
On September 12, INFA announced that Ricoh Company, Ltd., a leading provider of document management solutions, selected its Intelligent Data Management Cloud™ (IDMC) to accelerate Ricoh’s GLIDER data infrastructure project to support the overall business transformation of Ricoh becoming a digital services company.
In the fiscal second quarter (which ended on June 30), INFA’s total revenues increased 3.4% year-over-year to $422.48 million. Its non-GAAP income from operations improved 18% from the year-ago value to $151.04 million. The company’s non-GAAP net income came in at $88.95 million and $0.28 per share, indicating growth of 10.3% and 3.7% year-over-year, respectively.
Furthermore, the company’s adjusted EBITDA increased 17.1% from the prior year’s quarter to $154.79 million, and its adjusted free cash flow grew 85.5% from the year-ago value to $107.78 million.
According to the company’s financial guidance for the full year 2024, INFA now forecasts revenue to be range of $1.66 billion-$1.68 billion and its non-GAAP operating income to range from $538 million-$558 million. The company also expects adjusted unlevered free cash flow to be between $545 million and $565 million.
The consensus revenue estimate of $457.09 million for the fiscal fourth quarter (ending December 2024) represents a 2.7% increase year-over-year. The consensus EPS estimate of $0.38 for the current quarter indicates a 17.5% improvement year-over-year. The company has an impressive surprise history; it surpassed the consensus revenue and EPS in three of the trailing four quarters.
Over the past year, the stock has surged 8.9%, closing the last trading session at $25.47.
Based on eight Wall Street analysts offering 12-month price targets for INFA in the last three months, the average target price is $33.38, indicating a 31.1% change from the last price, with a high forecast of $37 and a low forecast of $27.
INFA’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It also has a B grade for Growth and Quality. Within the A-rated Software - SAAS industry, it is ranked #6 out of 18 stocks. Click here to see INFA’s ratings for Value, Momentum, Stability, and Sentiment.
UiPath Inc. (PATH)
PATH is an enterprise automation and AI software company that provides an end-to-end automation platform that offers a variety of international Robotic Process Automation (RPA) solutions. It has a market cap of $7.44 billion.
On October 23, PATH announced the transformation of operations for Omega Healthcare, a global leader in revenue cycle management, healthcare, and clinical enablement services, through its AI-powered automation. The partnership could position PATH as a frontrunner in AI-driven automation and deliver significant outcomes.
On October 22, PATH announced a strategic partnership with Inflection AI to integrate the UiPath Platform with the new Inflection for Enterprise solution, allowing enterprises to achieve more operational efficiency and effectiveness without compromising trust and AI security options.
This partnership will provide PATH with a significant private cloud alternative for agentic automation tailored to the industries with the most stringent security requirements.
PATH’s revenues for the second quarter (ended July 31, 2024) increased 10.1% year-over-year to $316.25 million. It reported a non-GAAP gross profit of $263.19 million, indicating a 6.6% growth from the prior-year quarter, while its non-GAAP net income for the quarter stood at $23.76 million or $0.04 per share. Also, the company’s non-GAAP adjusted free cash flow increased 25.6% year-over-year, amounting to $149.78 million.
As per the financial outlook for the fiscal year 2025, PATH forecasts revenue to be between $1.42 billion and $1.43 billion. The company also expects a non-GAAP operating income of approximately $170 million.
Street expects PATH’s EPS for the fiscal year 2026 to increase 10.6% year-over-year to $0.44. Its revenue for the same year is expected to grow 11% year-over-year to $1.58 billion.
Shares of PATH have gained 17.4% over the past year to close the last trading session at $13.53.
Based on 17 Wall Street analysts offering 12-month price targets for PATH in the last three months, the average target price is $15.75, indicating a 16.4% change from the last price, with a high forecast of $19 and a low forecast of $13.
It’s no surprise that PATH has an overall rating of B, which equates to a Buy in our POWR Ratings system. It has a B grade for Growth and Quality. Out of 18 stocks in the Software - SAAS industry, PATH is ranked #10.
Beyond what is stated above, we’ve also rated PATH for Value, Momentum, Stability, and Sentiment. Get all PATH ratings here.
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OTEX shares were trading at $29.35 per share on Thursday afternoon, down $1.14 (-3.74%). Year-to-date, OTEX has declined -27.87%, versus a 26.32% rise in the benchmark S&P 500 index during the same period.
About the Author: ShreyaRathi
