2 Business Services Firms Poised to Beat Estimates This Earnings Season

Reflecting on the first quarter of 2025, the U.S. service sector maintained strong momentum, benefiting from economic stability and continued expansion in non-manufacturing activities. Key growth drivers included the accelerating AI revolution, rising demand for cost efficiency, and an increased emphasis on regulatory compliance. Digital transformation remained pivotal, reshaping business operations and enhancing service delivery.

Multiple service industries, including transportation and warehousing, retail and wholesale trade, utilities, finance, insurance, health care, and social assistance, demonstrated resilience and healthy activity throughout the quarter. Their sustained strength underscores the sector’s crucial role in supporting broader economic stability and growth.

Some service providers are set to report their earnings results over the next few weeks. We have picked two stocks, PagSeguro Digital PAGS and Bit Digital BTBT, which are well-positioned to beat earnings estimates this season.

Resilient Growth and Strong Service Demand

The economy remained resilient, with GDP growing 3% in the second quarter of 2025, according to the advance estimate released by the Bureau of Economic Analysis, sharply swinging from the 0.5% decline recorded in the first quarter. Non-manufacturing activities remained robust as the Services PMI, as reported by the Institute for Supply Management, stood at 50.8% in July, indicating expansion. The index has remained above the key 50% mark in 11 of the past 12 months.

Several industry-specific factors fueled growth in the quarter. Essential services, such as waste management, experienced steady demand, while risk mitigation and consulting services saw increased relevance amid evolving regulations. Additionally, companies sought expertise in operational efficiency and cost reduction, reinforcing the demand for specialized service providers.

Stocks Poised to Beat This Season

With the existence of a number of players in the sector, finding the right business services stocks that have the potential to beat on earnings can be daunting. Our proprietary methodology, however, makes it fairly simple.

You could narrow down the list of choices by looking at stocks that have the combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP is our proprietary methodology for determining stocks that have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.

Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%.

Here are our picks.

PagSeguro Digital: The Zacks Consensus Estimate for the company’s second-quarter 2025 revenues is pegged at 898.6 million, indicating year-over-year growth of 2.8%. The consensus estimate for earnings is pegged at 31 cents per share, implying a 3.2% year-over-year decline. The company beat the consensus estimate in all the past four quarters, with an average surprise of 8.5%.

PAGS has an Earnings ESP of +8.20% and a Zacks Rank of 2. The company is scheduled to declare its second-quarter 2025 results on Aug. 14. You can see the complete list of today’s Zacks #1 Rank stocks here.

PagSeguro Digital Ltd. Price and EPS Surprise

PagSeguro Digital Ltd. price-eps-surprise | PagSeguro Digital Ltd. Quote

Bit Digital: The Zacks Consensus Estimate for the company’s second-quarter 2025 revenues is pegged at 25.4 million, indicating a year-over-year decline of 12.4%. The consensus estimate for the bottom line is pegged at a loss of 3 cents per share, implying a year-over-year widening of 200%. The company missed the consensus estimate in two of the past four quarters, beat once, and matched once, with an average surprise of 85.4%.

BTBT has an Earnings ESP of +20.00% and a Zacks Rank of 3. The company is scheduled to declare its first-quarter 2025 results on Aug. 14.

Bit Digital, Inc. Price and EPS Surprise

Bit Digital, Inc. price-eps-surprise | Bit Digital, Inc. Quote

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This article originally published on Zacks Investment Research (zacks.com).

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