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2 Services Stocks to Target This Week and 1 We Avoid
Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. Market leaders have certainly capitalized on outsourcing trends and digital transformation initiatives to boost sales, helping fuel a 19.6% gain for the industry over the past six months - 6.1 percentage points higher than the S&P 500.
Regardless of these results, investors must exercise caution as many companies in this space are sensitive to the ebbs and flows of the broader economy. Keeping that in mind, here are two resilient services stocks at the top of our wish list and one we would avoid.
One Business Services Stock to Sell:
Verisk (VRSK)
Market Cap: $23.1 billion
Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ:VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.
Why Are We Wary of VRSK?
- Annual revenue growth of 1.7% over the last five years was below our standards for the business services sector
- Earnings per share lagged its peers over the last two years as they only grew by 8% annually
Verisk is trading at $177.28 per share, or 21.7x forward P/E. If you’re considering VRSK for your portfolio, see our FREE research report to learn more.
Two Business Services Stocks to Watch:
IonQ (IONQ)
Market Cap: $14.41 billion
Founded by quantum physics pioneers from the University of Maryland and Duke University in 2015, IonQ (NYSE:IONQ) develops quantum computers that process information using trapped ions to solve complex computational problems beyond the capabilities of traditional computers.
Why Do We Like IONQ?
- Impressive 181% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Notable projected revenue growth of 166% for the next 12 months hints at market share gains
- Adjusted operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
At $36.28 per share, IonQ trades at 22.4x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Motorola Solutions (MSI)
Market Cap: $73.86 billion
Born from the company that invented the first portable handheld police radio in 1940, Motorola Solutions (NYSE:MSI) provides mission-critical communications, video security, and command center software solutions for public safety agencies and enterprise customers.
Why Is MSI a Good Business?
- Annual revenue growth of 9.2% over the last five years was superb and indicates its market share increased during this cycle
- Adjusted operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Strong free cash flow margin of 18.9% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute
Motorola Solutions’s stock price of $447.72 implies a valuation ratio of 24.5x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.