1 Services Stock with Impressive Fundamentals and 2 Facing Headwinds

Business services providers use their specialized expertise to help enterprises streamline operations and cut costs. But increasing competition from AI-driven upstarts has tempered enthusiasm, and over the past six months, the industry has pulled back by 4.1%. This performance was discouraging since the S&P 500 returned 5.2%.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. With that said, here is one services stock poised to generate sustainable market-beating returns and two best left ignored.

Two Business Services Stocks to Sell:

ABM (ABM)

Market Cap: $3.00 billion

With roots dating back to 1909 as a window washing company, ABM Industries (NYSE:ABM) provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.

Why Should You Sell ABM?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.3 percentage points

At $48.14 per share, ABM trades at 12.4x forward P/E. To fully understand why you should be careful with ABM, check out our full research report (it’s free).

CDW (CDW)

Market Cap: $21.46 billion

Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ:CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services.

Why Is CDW Risky?

1. Annual sales declines of 1.1% for the past two years show its products and services struggled to connect with the market during this cycle
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.9%
3. Flat earnings per share over the last two years underperformed the sector average

CDW is trading at $163.49 per share, or 16.4x forward P/E. Check out our free in-depth research report to learn more about why CDW doesn’t pass our bar.

One Business Services Stock to Buy:

QuinStreet (QNST)

Market Cap: $839.5 million

Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet (NASDAQ:QNST) operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.

Why Will QNST Outperform?

1. Market share has increased this cycle as its 37.2% annual revenue growth over the last two years was exceptional
2. Projected revenue growth of 7.5% for the next 12 months suggests its momentum from the last two years will persist
3. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 160% annually

QuinStreet’s stock price of $14.74 implies a valuation ratio of 13.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% 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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