Business services providers thrive by solving complex operational challenges for their clients, allowing them to focus on their secret sauce. 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 3.3% over the past six months. This drop was almost identical to the S&P 500’s decline.
While some companies have durable competitive advantages that enable them to grow in any landscape, the odds aren’t great for the ones we’re analyzing today. With that said, here are three services stocks we’re passing on.
Market Cap: $12.19 billion
Operating across the United States, Liberty Broadband (NASDAQ:LBRDK) is a provider of high-speed internet, cable television, and telecommunications services across various markets.
Why Does LBRDK Fall Short?
Liberty Broadband is trading at $85.05 per share, or 16.3x forward price-to-earnings. Check out our free in-depth research report to learn more about why LBRDK doesn’t pass our bar.
Market Cap: $4.17 billion
Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro (NYSE:INGM) is a global technology distributor that connects manufacturers with resellers, providing hardware, software, cloud services, and logistics expertise.
Why Should You Dump INGM?
At $17.74 per share, Ingram Micro trades at 5.7x forward price-to-earnings. If you’re considering INGM for your portfolio, see our FREE research report to learn more.
Market Cap: $867.1 million
Originally launched in 2004 as a platform for filmmakers seeking a high-quality alternative to YouTube, Vimeo (NASDAQ:VMEO) provides cloud-based video creation, editing, hosting, and distribution software that helps businesses and creators make, manage, and share professional-quality videos.
Why Does VMEO Worry Us?
Vimeo’s stock price of $5.26 implies a valuation ratio of 17.6x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than VMEO.
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
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