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Top 3 Business Services Stocks to Enhance Your Portfolio
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The U.S. business services space has been benefiting from the strong fundamentals of the economy. Despite facing a record-high interest rate, elevated inflation rate and extremely tight monetary control by the Fed, this sector has performed well in the past three months.
Industries within this sector are mature, with demand for services in good shape. Revenues, income and cash flows are anticipated to gradually reach the pre-pandemic levels, aiding most industry players in paying out stable dividends.
The pandemic has changed the way industry players conduct business and deliver services. The industry’s key focus is currently on channeling money and efforts toward more effective operational components, such as technology, digital transformation, data-driven decision-making and enhanced cybersecurity.
To position themselves suitably in the post-pandemic era and better utilize the opportunities that the economic recovery will bring, service providers are increasing their efforts toward formulating and reassessing strategic initiatives and targeting end markets.
The staffing industry has been benefiting from a resilient labor market. The space has been increasingly leveraging technology to streamline processes, enhance efficiency, and provide better services. Utilizing tech-driven recruitment methods such as AI, social media, and Big Data are on the rise.
Higher talent costs due to a competitive talent market have been a headwind for the industry. However, growing immigration is helping service providers thrive with the increased flow of foreign talent.
Our Top Picks for Business Services Stocks
We have narrowed our search to three business services stocks with strong growth potential for the rest of 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Willdan Group Inc. (WLDN - Free Report) is a provider of professional technical and consulting services to utilities, private industry, and public agencies at all levels of government. WLDN enable its clients to realize cost and energy savings by providing a wide range of specialized services. These include Energy Efficiency and Sustainability, Engineering and Planning, Economic and Financial Consulting, and National Preparedness and Interoperability.
WLDN operates its business through a network of offices located primarily in California and New York. WLDN also has operations in Arizona, Colorado, Florida, Illinois, Kansas, Oregon, Texas, Washington and Washington, DC.
Zacks Rank #1 Willdan Group has an expected revenue and earnings growth rate of 7.5% and 12.6%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter and current-year earnings have improved 13.3% and 5.9%, respectively, over the last 30 days.
Image Source: Zacks Investment Research
UL Solutions Inc. (ULS - Free Report) provides safety science services. ULS’ operating segments include Industrial, Consumer, and Software and Advisory. The Industrial segment of ULS offers testing, inspection, and certification services.
The Consumer segment of ULS offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services. The Software and Advisory segment of ULS provides software and technical advisory services.
Zacks Rank #2 UL Solutions has an expected revenue and earnings growth rate of 5.3% and 14.6%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter and current-year earnings have improved 2.7% and 4.9%, respectively, over the last 30 days.
Image Source: Zacks Investment Research
Affirm Holdings Inc. (AFRM - Free Report) operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. AFRM’s platform includes point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app. AFRM’s commerce platform, agreements with originating banks, and capital markets partners enable consumers to pay for a purchase over time with terms ranging up to 60 months.
Affirm Holdings has active merchants covering small businesses, large enterprises, direct-to-consumer brands, brick-and-mortar stores, and companies with an omni-channel presence. AFRM’s merchants represent a range of industries, including sporting goods and outdoors, furniture and homewares, travel and ticketing, apparel, accessories, consumer electronics, and jewelry.
Zacks Rank #2 Affirm Holdings has an expected revenue and earnings growth rate of 22.9% and 26.5%, respectively, for the current year (ending June 2025). The Zacks Consensus Estimate for current-quarter and current-year earnings have improved 5.4% and 11.5%, respectively, over the last 90 days.
Image Source: Zacks Investment Research
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Top 3 Business Services Stocks to Enhance Your Portfolio
The U.S. business services space has been benefiting from the strong fundamentals of the economy. Despite facing a record-high interest rate, elevated inflation rate and extremely tight monetary control by the Fed, this sector has performed well in the past three months.
Industries within this sector are mature, with demand for services in good shape. Revenues, income and cash flows are anticipated to gradually reach the pre-pandemic levels, aiding most industry players in paying out stable dividends.
The pandemic has changed the way industry players conduct business and deliver services. The industry’s key focus is currently on channeling money and efforts toward more effective operational components, such as technology, digital transformation, data-driven decision-making and enhanced cybersecurity.
To position themselves suitably in the post-pandemic era and better utilize the opportunities that the economic recovery will bring, service providers are increasing their efforts toward formulating and reassessing strategic initiatives and targeting end markets.
The staffing industry has been benefiting from a resilient labor market. The space has been increasingly leveraging technology to streamline processes, enhance efficiency, and provide better services. Utilizing tech-driven recruitment methods such as AI, social media, and Big Data are on the rise.
Higher talent costs due to a competitive talent market have been a headwind for the industry. However, growing immigration is helping service providers thrive with the increased flow of foreign talent.
Our Top Picks for Business Services Stocks
We have narrowed our search to three business services stocks with strong growth potential for the rest of 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Willdan Group Inc. (WLDN - Free Report) is a provider of professional technical and consulting services to utilities, private industry, and public agencies at all levels of government. WLDN enable its clients to realize cost and energy savings by providing a wide range of specialized services. These include Energy Efficiency and Sustainability, Engineering and Planning, Economic and Financial Consulting, and National Preparedness and Interoperability.
WLDN operates its business through a network of offices located primarily in California and New York. WLDN also has operations in Arizona, Colorado, Florida, Illinois, Kansas, Oregon, Texas, Washington and Washington, DC.
Zacks Rank #1 Willdan Group has an expected revenue and earnings growth rate of 7.5% and 12.6%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter and current-year earnings have improved 13.3% and 5.9%, respectively, over the last 30 days.
Image Source: Zacks Investment Research
UL Solutions Inc. (ULS - Free Report) provides safety science services. ULS’ operating segments include Industrial, Consumer, and Software and Advisory. The Industrial segment of ULS offers testing, inspection, and certification services.
The Consumer segment of ULS offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services. The Software and Advisory segment of ULS provides software and technical advisory services.
Zacks Rank #2 UL Solutions has an expected revenue and earnings growth rate of 5.3% and 14.6%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter and current-year earnings have improved 2.7% and 4.9%, respectively, over the last 30 days.
Image Source: Zacks Investment Research
Affirm Holdings Inc. (AFRM - Free Report) operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. AFRM’s platform includes point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app. AFRM’s commerce platform, agreements with originating banks, and capital markets partners enable consumers to pay for a purchase over time with terms ranging up to 60 months.
Affirm Holdings has active merchants covering small businesses, large enterprises, direct-to-consumer brands, brick-and-mortar stores, and companies with an omni-channel presence. AFRM’s merchants represent a range of industries, including sporting goods and outdoors, furniture and homewares, travel and ticketing, apparel, accessories, consumer electronics, and jewelry.
Zacks Rank #2 Affirm Holdings has an expected revenue and earnings growth rate of 22.9% and 26.5%, respectively, for the current year (ending June 2025). The Zacks Consensus Estimate for current-quarter and current-year earnings have improved 5.4% and 11.5%, respectively, over the last 90 days.
Image Source: Zacks Investment Research