Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. 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 6.6% over the past six months. This performance was worse than the S&P 500’s 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 are three services stocks we think can generate sustainable market-beating returns.
Copart (CPRT)
Market Cap: $31.82 billion
Starting as a single salvage yard in California in 1982, Copart (NASDAQ: CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters.
Why Do We Love CPRT?
- Annual revenue growth of 15.1% over the past five years was outstanding, reflecting market share gains this cycle
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 17.5% outpaced its revenue gains
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
Copart is trading at $33.41 per share, or 20.7x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Super Micro (SMCI)
Market Cap: $13.34 billion
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Should You Buy SMCI?
- Annual revenue growth of 74.1% over the last two years was superb and indicates its market share increased during this cycle
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 45.5% annually
- Free cash flow turned positive over the last five years, indicating the company has passed a significant test
Super Micro’s stock price of $22.47 implies a valuation ratio of 9.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
EXL (EXLS)
Market Cap: $4.75 billion
Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ: EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.
Why Will EXLS Beat the Market?
- Annual revenue growth of 16.8% over the last five years was superb and indicates its market share increased during this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 22.6% to outpace its revenue gains
- Industry-leading 21.3% return on capital demonstrates management’s skill in finding high-return investments
At $30.55 per share, EXL trades at 13.8x 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
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum 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.
