Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. Furthermore, the demand for their offerings is rising as more clients outsource non-core functions, a trend that has enabled the industry to return 8.6% over the past six months, almost identical to the S&P 500.
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 are three services stocks boasting durable advantages.
IonQ (IONQ)
Market Cap: $21.65 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 Are We Fans of IONQ?
- Market share has increased this cycle as its 172% annual revenue growth over the last two years was exceptional
- Notable projected revenue growth of 53.2% for the next 12 months hints at market share gains
- Adjusted operating margin expanded by 707.5 percentage points over the last five years as it scaled and became more efficient
IonQ is trading at $56.17 per share, or 70.8x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
ADP (ADP)
Market Cap: $90.25 billion
Processing one out of every six paychecks in the United States, ADP (NASDAQ: ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.
Why Are We Backing ADP?
- Solid 8.1% annual revenue growth over the last five years indicates its offerings solve complex business issues
- Enormous revenue base of $21.6 billion provides significant distribution advantages
- Strong free cash flow margin of 21.3% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute
At $217.03 per share, ADP trades at 18.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Brown & Brown (BRO)
Market Cap: $20.32 billion
With roots dating back to 1939 and operations spanning 44 U.S. states and 14 countries, Brown & Brown (NYSE: BRO) is an insurance brokerage and risk management firm that markets and sells insurance products across property, casualty, and employee benefits sectors.
Why Will BRO Outperform?
- Forecasted revenue growth of 11.5% for the next 12 months indicates its momentum over the last two years is sustainable
- Earnings per share grew by 18.5% annually over the last five years, massively outpacing its peers
- Robust free cash flow margin of 23.2% gives it many options for capital deployment
Brown & Brown’s stock price of $58.97 implies a valuation ratio of 13x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
