2 Services Stocks with Solid Fundamentals and 1 That Underwhelm

Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. Still, investors are uneasy as firms face challenges from AI-driven disruptors and tightening corporate budgets. These doubts have caused the industry to lag recently as services stocks have collectively shed 1.2% over the past six months. This drawdown was disappointing since the S&P 500 climbed 5.6%.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. On that note, here are two resilient services stocks at the top of our wish list and one we’re swiping left on.

One Business Services Stock to Sell:

Equifax (EFX)

Market Cap: $24.88 billion

Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE:EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.

Why Do We Think Twice About EFX?

1. Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 4.1 percentage points
2. Earnings per share lagged its peers over the last five years as they only grew by 2.2% annually

Equifax is trading at $206.76 per share, or 23.9x forward P/E. Check out our free in-depth research report to learn more about why EFX doesn’t pass our bar.

Two Business Services Stocks to Watch:

ADP (ADP)

Market Cap: $89.67 billion

Processing one out of every six paychecks in the United States, ADP (NASDAQ:ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.

Why Will ADP Beat the Market?

1. 7.8% annual revenue growth over the last five years surpassed the sector average as its services resonated with customers
2. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
3. Returns on capital are growing as management capitalizes on its market opportunities

ADP’s stock price of $222.77 implies a valuation ratio of 18.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Taboola (TBLA)

Market Cap: $943.8 million

Often appearing as those "You May Also Like" or "Recommended For You" boxes at the bottom of news articles, Taboola (NASDAQ:TBLA) operates a digital platform that recommends personalized content to users across publisher websites, helping both publishers monetize their sites and advertisers reach target audiences.

Why Do We Like TBLA?

1. Annual revenue growth of 15.2% over the past two years was outstanding, reflecting market share gains this cycle
2. Free cash flow margin increased by 7.3 percentage points over the last five years, giving the company more capital to invest or return to shareholders
3. Returns on capital are increasing as management’s prior bets are starting to bear fruit

At $3.39 per share, Taboola trades at 5.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

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 Kadant (+351% five-year return). Find your next big winner with StockStory today.