Business services providers use their specialized expertise to help enterprises streamline operations and cut costs. These firms have helped their customers unlock huge efficiencies, so it’s no surprise the industry has posted a 19.8% gain over the past six months, beating the S&P 500 by 8.1 percentage points.
Although these companies have produced results, only a handful will thrive over the long term as AI-driven upstarts are rapidly taking share from the incumbents. On that note, here is one services stock boasting a durable advantage and two that may face trouble.
Two Business Services Stocks to Sell:
OPENLANE (OPLN)
Market Cap: $4.29 billion
Facilitating the sale of approximately 1.3 million used vehicles in 2023, OPENLANE (NYSE: OPLN) operates digital marketplaces that connect sellers and buyers of used vehicles across North America and Europe, facilitating wholesale transactions.
Why Are We Hesitant About OPLN?
- Sales trends were unexciting over the last five years as its 2.1% annual growth was below the typical business services company
- Low returns on capital reflect management’s struggle to allocate funds effectively
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
OPENLANE is trading at $34.90 per share, or 22.1x forward P/E. Check out our free in-depth research report to learn more about why OPLN doesn’t pass our bar.
SAIC (SAIC)
Market Cap: $5.3 billion
With over five decades of experience supporting national security missions, Science Applications International Corporation (NASDAQ: SAIC) provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.
Why Do We Think Twice About SAIC?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Projected sales decline of 1.4% for the next 12 months points to an even tougher demand environment ahead
SAIC’s stock price of $126.57 implies a valuation ratio of 12.6x forward P/E. If you’re considering SAIC for your portfolio, see our FREE research report to learn more.
One Business Services Stock to Buy:
Planet Labs (PL)
Market Cap: $6.54 billion
Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.
Why Will PL Beat the Market?
- Average backlog growth of 124% over the past two years shows it has a steady sales pipeline that will drive future orders
- Additional sales over the last two years increased its profitability as the 78.7% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin is now positive, showing the company has crossed a key inflection point
At $19.09 per share, Planet Labs trades at 227.7x forward EV-to-EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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.
