The goods economy gets the headlines when factories slow. But services are still where a lot of the economy is doing the work.
This week’s services data gives investors another read on whether consumers and businesses are still spending on rides, food service, uniforms, pest control, data, ratings, and other everyday services.
If the services economy holds up, these stocks stay relevant.
Growth Stocks Ahead (Sponsored)
Many investors are seeing solid gains in today’s market, but solid gains often hide opportunities with far greater potential.
A new analysis highlights the 5 Stocks Set to Double, selected from thousands of companies showing early signs of powerful growth.
These picks feature strong fundamentals and technical indicators that often appear before meaningful upside.
Past editions of this research uncovered gains of +175%, +498%, and +673%.
Download the 5 Stocks Set to Double. Free Today.
*This free resource is being sent by Zacks. We identify investment resources you may choose to use in making your own decisions. Use of this resource is subject to the Zacks Terms of Service.
*Past performance is no guarantee of future results. Investing involves risk. This material does not constitute investment, legal, accounting, or tax advice. Zacks Investment Research is not a licensed dealer, broker, or investment adviser.
Theme: Services Spending, Business Services, Recurring Revenue, Outsourcing, and Non-Goods Demand
This setup works because services are harder to cut than they look.
Consumers still need transportation, delivery, food access, and convenience. Businesses still need facility services, uniforms, safety products, pest control, data, market intelligence, and outsourced operations. Investors still need benchmarks, ratings, and analytics.
That makes services a useful place to look when manufacturing, hiring, and discretionary goods feel uneven.
The market wants to know whether the U.S. economy is still expanding underneath the surface. Services data is one of the cleaner ways to check.
What’s Driving It
The services economy has been holding up better than many goods-related categories.
May ISM Services PMI came in at 54.5, showing continued expansion, and investors are watching the June readout to see whether demand, employment, and prices are still resilient.
Company results support the theme. Uber reported Q1 revenue of $13.2 billion, gross bookings of $53.7 billion, and adjusted EBITDA up 33% to $2.5 billion. Aramark reported Q2 revenue of $4.91 billion, up 14.7%, with operating income up 26.2%.
Cintas posted fiscal Q3 revenue of $2.84 billion, up 8.9%, and EPS up 9.7%. Rollins reported Q1 revenue of $906 million, up 10.2%, with organic revenue up 6.6%. S&P Global reported Q1 revenue up 10% to $4.17 billion, helped by demand for ratings, data, and analytics.
Here is the chain reaction:
Services PMI lands → services demand gets repriced
Services demand holds → recurring service models stay attractive
Consumers keep spending on convenience → mobility and local services benefit
Businesses keep outsourcing → workplace service names hold up
Goods economy stays uneven → services leaders get a premium
What’s Working
What is working now is recurring demand.
Uber benefits when people keep moving, ordering, and using local services. Aramark benefits when institutions, stadiums, schools, hospitals, and workplaces keep outsourcing food and facility operations.
Cintas benefits from recurring uniform, safety, and facility-service contracts. Rollins benefits from pest control, which is not a luxury when customers need protection and compliance.
S&P Global benefits when investors, companies, and lenders need data, ratings, and benchmarks in a volatile market.
The best services companies are not selling one-time products. They are selling habits, contracts, subscriptions, compliance, and necessity.
That makes them useful in a choppy economy.
What to Watch
You should watch ISM services new orders, business activity, employment, prices paid, and supplier delivery trends.
The biggest risk is services inflation. If prices paid stay hot, the Fed may not get comfortable enough to ease policy. That could hurt multiples across quality service names.
The second risk is margin pressure. Services businesses can hold demand but still struggle if labor, insurance, food, fuel, or technology costs rise faster than pricing.
Uber Technologies (UBER)
What it does: Uber operates mobility, delivery, freight, advertising, and local services platforms across global markets.
Why it fits: Uber is the consumer-convenience name in the basket. Q1 gross bookings rose to $53.7 billion, revenue reached $13.2 billion, and adjusted EBITDA grew 33% to $2.5 billion.
What stands out: This is the platform services stock. Uber benefits when consumers keep paying for rides, delivery, and convenience, while the company keeps improving profitability.
What to watch: Watch gross bookings, trip growth, delivery margins, mobility take rate, autonomous vehicle partnerships, and free cash flow.
The Takeaway: Buy this first if you want the strongest consumer-services platform tied to mobility and delivery demand.
The risk is autonomous vehicle disruption. Uber has partnerships, but investors will keep watching whether AV networks pressure the long-term model.
Aramark (ARMK)
What it does: Aramark provides food service, facilities management, uniforms, and workplace services to schools, hospitals, businesses, stadiums, prisons, and institutions.
Why it fits: Aramark gives the basket outsourced food and facility-services exposure. Q2 revenue rose 14.7% to $4.91 billion, operating income rose 26.2%, and management pointed to strong organic growth.
What stands out: This is the institutional services name. Aramark benefits when customers keep outsourcing non-core operations instead of handling food, facilities, and workplace services internally.
What to watch: Watch organic revenue growth, margin expansion, contract wins, food inflation, labor costs, and guidance.
The Takeaway: Buy this if you want outsourced services exposure with improving margin momentum.
The risk is cost inflation. Food and labor costs can pressure margins if pricing does not keep up.
Strong Buys Now (Sponsored)
A newly released report highlights seven stocks chosen for their near-term potential.
Selections are based on a mix of technical and fundamental indicators.
While past picks have performed well, future results are uncertain.
The report is available for a limited time.
Access the free report.
*This free resource is being sent by Zacks. We identify investment resources you may choose to use in making your own decisions. Use of this resource is subject to the Zacks Terms of Service.
*Past performance is no guarantee of future results. Investing involves risk. This material does not constitute investment, legal, accounting, or tax advice. Zacks Investment Research is not a licensed dealer, broker, or investment adviser.
Cintas (CTAS)
What it does: Cintas provides uniforms, facility services, restroom supplies, safety products, first aid, fire protection, and workplace services.
Why it fits: Cintas gives the basket one of the cleanest recurring business-service models in the market. Fiscal Q3 revenue rose 8.9% to $2.84 billion, and EPS rose 9.7%.
What stands out: This is the boring compounder. Businesses need uniforms, safety products, facility supplies, and compliance services whether the market is excited or nervous.
What to watch: Watch organic growth, gross margin, route efficiency, customer retention, UniFirst transaction progress, and employment trends.
The Takeaway: Buy this if you want the highest-quality recurring business-services stock in the basket.
The risk is valuation. Cintas is rarely cheap, and slower employment growth can pressure uniform demand.
Rollins (ROL)
What it does: Rollins provides pest control and wildlife management services through brands including Orkin and other residential and commercial pest-control operators.
Why it fits: Rollins gives the basket defensive residential and commercial services exposure. Q1 revenue rose 10.2%, organic revenue grew 6.6%, and adjusted EBITDA rose to $179 million.
What stands out: This is the recurring necessity name. Pest control is not a flashy category, but it has repeat demand, route density, and strong pricing characteristics.
What to watch: Watch organic growth, residential demand, commercial demand, margins, acquisitions, and customer retention.
The Takeaway: Buy this if you want a defensive services compounder with recurring revenue and pricing power.
The risk is margin pressure. Rollins can keep growing revenue, but investors need EBITDA margins to improve too.
AI Disruption Ahead (Sponsored)
Some of the world’s biggest AI insiders are preparing for something most Americans are not seeing yet.
Sam Altman, Mark Zuckerberg, Peter Thiel, and other billionaires are pushing AI into the mainstream while quietly preparing for major disruption behind the scenes.
Whitney Tilson believes this could lead to a permanent reset in America, with serious financial consequences for people over 50.
He says one specific money move could help you prepare now, before the next phase of AI disruption hits.
Click here to see Whitney Tilson’s urgent AI warning and the move he says to make now.
Poll: Which sector do you think is most attractively set up going into Q3 earnings season?
S&P Global (SPGI)
What it does: S&P Global provides credit ratings, benchmarks, indices, market data, analytics, commodity intelligence, and financial workflow tools.
Why it fits: S&P Global gives the basket financial-services infrastructure exposure. Q1 revenue rose 10% to $4.17 billion, ratings revenue rose 13%, and market intelligence revenue rose 8%.
What stands out: This is the market-data and ratings toll road. When volatility rises, investors and companies need data, benchmarks, risk tools, and credit ratings.
What to watch: Watch bond issuance, ratings revenue, market intelligence growth, index revenue, margin performance, and AI disruption concerns.
The Takeaway: Buy this if you want high-quality financial data and ratings stock tied to market activity.
The risk is that investors keep worrying about AI disruption in data and analytics, even if the near-term numbers remain solid.
Elite Trade Club Insider
$87 Million In Insider Selling Just Hit Two High-Multiple Growth Winners
You’re watching two premium growth charts from the outside, where AI infrastructure and cancer diagnostics still give investors plenty of reasons to stay bullish. But Elite Trade Club Insider readers are seeing the part the crowd usually notices late: insiders are turning massive rallies into cash while the stories still sound strongest.
You’re reading the free version. Here’s what we held back.
Every day, insiders and institutions move millions before the market catches on. We surface the data behind those moves before the rest of the market sees it.
A subscription gets you:
The insider buys, options bets, and dark pool moves the free edition can't show you. Unlocked every weekday.
A Sunday Deep Dive that tells you where to look before Monday's bell rings.
The Friday Smart Money Brief: who bought, who sold, where the big options bets landed, and where institutions are hiding volume. Three data layers. One email.
A Monthly Insider Scorecard so you always know whether smart money is buying or selling the market.
Every past Insider edition, unlocked, on elitetrade.club. Go back and see what you missed.
$25/mo or $250/yr. 30-day money back guarantee. Cancel anytime. Founding member pricing: lock in $25/mo before we raise it.
This theme works because services are still carrying a lot of the economy.
Uber is the consumer-convenience platform. Aramark is the outsourced institutional services name. Cintas is the recurring workplace-services compounder. Rollins is the pest-control necessity stock. S&P Global is the financial-data and ratings toll road.
Stay constructive if services demand holds, but watch prices and labor costs. The best services stocks can handle a slower goods economy, but they still need margins, retention, and pricing power to keep working.
Best Regards,
— Adam Garcia
Elite Trade Club
Click here to get our daily newsletter straight to your cell for free.
P.S. Just like this newsletter, it's 100% free*, and you can stop at any time by replying STOP.
