Business services providers thrive by solving complex operational challenges for their clients, allowing them to focus on their secret sauce. But increasing competition from AI-driven upstarts has tempered enthusiasm, limiting the industry’s gains to 8% over the past six months. This return lagged the S&P 500’s 10.8% climb.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. On that note, here are two services stocks boasting durable advantages and one best left ignored.
One Business Services Stock to Sell:
Sinclair (SBGI)
Market Cap: $997.3 million
With over 2,400 hours of local news produced weekly and 640 broadcast channels reaching millions of American homes, Sinclair (NASDAQ:SBGI) operates a network of 185 local television stations across 86 U.S. markets, producing news programming and distributing content from major networks.
Why Do We Avoid SBGI?
- Sales tumbled by 11.4% annually over the last five years, showing market trends are working against it during this cycle
- Diminishing returns on capital suggest its earlier profit pools are drying up
- 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Sinclair is trading at $13.82 per share, or 22.6x forward P/E. To fully understand why you should be careful with SBGI, check out our full research report (it’s free).
Two Business Services Stocks to Watch:
TTM Technologies (TTMI)
Market Cap: $13.71 billion
As one of the world's largest printed circuit board manufacturers with facilities spanning North America and Asia, TTM Technologies (NASDAQ:TTMI) manufactures printed circuit boards (PCBs) and radio frequency (RF) components for aerospace, defense, automotive, and telecommunications industries.
Why Is TTMI a Top Pick?
- Annual revenue growth of 17.2% over the last two years was superb and indicates its market share increased during this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 32.8%
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 35.5% annually
TTM Technologies’s stock price of $133.93 implies a valuation ratio of 29.3x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Magnite (MGNI)
Market Cap: $2.72 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 Do We Like MGNI?
- Market share has increased this cycle as its 24% annual revenue growth over the last five years was exceptional
- Earnings per share have massively outperformed its peers over the last two years, increasing by 25.8% annually
- Improving returns on capital suggest its past investments are beginning to deliver value
At $18.99 per share, Magnite trades at 17.4x forward P/E. Is now the time to initiate a position? Find out in our full 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.