Business services providers use their specialized expertise to help enterprises streamline operations and cut costs. Market leaders have certainly capitalized on outsourcing trends and digital transformation initiatives to boost sales, helping fuel a 39.6% gain for the industry over the past six months - 4.8 percentage points higher than the S&P 500.

Nevertheless, investors should tread carefully as many companies in this space are cyclical due to their reliance on corporate spending budgets. 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:

Jacobs Solutions (J)

Market Cap: $18.57 billion

With a workforce of approximately 45,000 professionals tackling complex challenges from water scarcity to cybersecurity, Jacobs Solutions (NYSE: J) provides engineering, consulting, and technical services focused on infrastructure, sustainability, and advanced technology solutions.

Why Do We Think J Will Underperform?

1. Sales were flat over the last two years, indicating it’s failed to expand this cycle
2. Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 4% annually
3. Low returns on capital reflect management’s struggle to allocate funds effectively

At $156.89 per share, Jacobs Solutions trades at 22.7x forward P/E. Dive into our free research report to see why there are better opportunities than J.

Two Business Services Stocks to Watch:

Arlo Technologies (ARLO)

Market Cap: $1.76 billion

Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE: ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.

Why Is ARLO on Our Radar?

1. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
2. Additional sales over the last two years increased its profitability as the 434% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin expanded by 17.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

Arlo Technologies is trading at $16.89 per share, or 25.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

Broadridge (BR)

Market Cap: $27.65 billion

Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE: BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.

Why Are We Fans of BR?

1. Solid 8.8% annual revenue growth over the last five years indicates its offering’s solve complex business issues
2. Additional sales over the last five years increased its profitability as the 11.7% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin grew by 4.2 percentage points over the last five years, giving the company more chips to play with

Broadridge’s stock price of $236.90 implies a valuation ratio of 25.3x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

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-micro-cap company Tecnoglass (+1,754% 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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