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 9.6% gain over the past six months, nearly mirrorring the S&P 500.

Regardless of these results, investors must exercise caution as many companies in this space are sensitive to the ebbs and flows of the broader economy. On that note, here is one services stock poised to generate sustainable market-beating returns and two we’re swiping left on.

Market Cap: $2.68 billion

With roots dating back to 1909 as a window washing company, ABM Industries (NYSE:ABM) provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.

Why Are We Wary of ABM?

Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion

Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew

Investment activity picked up over the last five years, pressuring its weak free cash flow margin of 1.9%

ABM’s stock price of $44.48 implies a valuation ratio of 11.2x forward P/E. If you’re considering ABM for your portfolio, see our FREE research report to learn more.

Market Cap: $2.16 billion

Powering billions of critical customer interactions annually, CSG Systems (NASDAQ:CSGS) provides cloud-based software platforms that help companies manage customer interactions, process payments, and monetize their services.

Why Are We Cautious About CSGS?

Annual revenue growth of 1.6% over the last two years was below our standards for the business services sector

Projected sales growth of 2% for the next 12 months suggests sluggish demand

Eroding returns on capital suggest its historical profit centers are aging

At $78.84 per share, CSG trades at 15.9x forward P/E. Check out our free in-depth research report to learn more about why CSGS doesn’t pass our bar.

Market Cap: $4.57 billion

With security scanners deployed at airports and borders worldwide and patient monitors used in hospitals across the globe, OSI Systems (NASDAQ:OSIS) designs and manufactures specialized electronic systems for security screening, patient monitoring, and optoelectronic applications.

Why Are We Bullish on OSIS?

Impressive 16.6% annual revenue growth over the last two years indicates it’s winning market share this cycle

Additional sales over the last two years increased its profitability as the 23.4% annual growth in its earnings per share outpaced its revenue

Free cash flow margin grew by 2.4 percentage points over the last five years, giving the company more chips to play with

OSI Systems is trading at $269.01 per share, or 26.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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 Kadant (+351% five-year return). Find your next big winner with StockStory today.