Business services providers use their specialized expertise to help enterprises streamline operations and cut costs. But cutbacks in corporate spending and the threat of new AI products have kept sentiment in check, and over the past six months, the industry has tumbled by 6.6%. This drawdown was worse than the S&P 500’s 2.1% fall.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. With that said, here is one services stock boasting a durable advantage and two best left ignored.
Two Business Services Stocks to Sell:
MillerKnoll (MLKN)
Market Cap: $988 million
Created through the 2021 merger of industry icons Herman Miller and Knoll, MillerKnoll (NASDAQ: MLKN) designs, manufactures, and distributes interior furnishings for offices, healthcare facilities, educational settings, and homes worldwide.
Why Are We Hesitant About MLKN?
- Muted 1.4% annual revenue growth over the last two years shows its demand lagged behind its business services peers
- Revenue growth over the past five years was nullified by the company’s new share issuances as its earnings per share fell by 7.9% annually
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
MillerKnoll is trading at $14.66 per share, or 7.5x forward P/E. Check out our free in-depth research report to learn more about why MLKN doesn’t pass our bar.
Avnet (AVT)
Market Cap: $5.06 billion
With a century-long history of adapting to technological evolution, Avnet (NASDAQ: AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.
Why Does AVT Give Us Pause?
- Annual sales declines of 4.9% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share have dipped by 29.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Low free cash flow margin of -0.2% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $61.95 per share, Avnet trades at 11.1x forward P/E. If you’re considering AVT for your portfolio, see our FREE research report to learn more.
One Business Services Stock to Buy:
CBIZ (CBZ)
Market Cap: $1.36 billion
With over 120 offices across 33 states and a team of more than 6,700 professionals, CBIZ (NYSE: CBZ) provides accounting, tax, benefits, insurance brokerage, and advisory services to help small and mid-sized businesses manage their finances and operations.
Why Are We Bullish on CBZ?
- Impressive 31.7% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings per share grew by 21.4% annually over the last two years, massively outpacing its peers
CBIZ’s stock price of $27.61 implies a valuation ratio of 7x forward P/E. Is now a good time to buy? 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 for 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 (+1,326% between June 2020 and June 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.
