Business services providers thrive by solving complex operational challenges for their clients, allowing them to focus on their secret sauce. 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 7.6% over the past six months. This drop was disappointing since the S&P 500 stood firm.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. On that note, here are two resilient services stocks at the top of our wish list and one that may face trouble.
One Business Services Stock to Sell:
Jabil (JBL)
Market Cap: $28.02 billion
With manufacturing facilities spanning the globe from China to Mexico to the United States, Jabil (NYSE: JBL) provides electronics design, manufacturing, and supply chain solutions to companies across various industries, from healthcare to automotive to cloud computing.
Why Does JBL Give Us Pause?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Poor free cash flow margin of 3.7% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $265.94 per share, Jabil trades at 19.1x forward P/E. To fully understand why you should be careful with JBL, check out our full research report (it’s free).
Two Business Services Stocks to Watch:
Genpact (G)
Market Cap: $6.50 billion
Originally spun off from General Electric in 2005 to provide business process services, Genpact (NYSE: G) is a global professional services firm that helps businesses transform their operations through digital technology, AI, and data analytics solutions.
Why Does G Stand Out?
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 11.5% exceeded its revenue gains over the last five years
- G is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its rising returns show it’s making even more lucrative bets
Genpact’s stock price of $38.32 implies a valuation ratio of 9.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Magnite (MGNI)
Market Cap: $1.80 billion
Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ: MGNI) operates the world's largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.
Why Is MGNI a Good Business?
- Impressive 26.4% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Robust free cash flow margin of 27.1% gives it many options for capital deployment
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Magnite is trading at $12.47 per share, or 11.8x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive 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.
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
