Economic strength, encouraging service activities, and increased adoption and success of the work-from-home trend enable the Zacks Business - Servicesindustry players to support the demand environment.

Driven by these positives, investors interested in the industry would do well to focus on stocks like Wolters Kluwer (WTKWY Quick QuoteWTKWY - Free Report) , APi Group (APG Quick QuoteAPG - Free Report) and Rentokil Initial (RTO Quick QuoteRTO - Free Report) .

About the Industry

The Zacks Business-Services industry includes companies that deliver diverse offerings, such as specialty rentals, supply chain solutions, e-commerce support, technology services, document and data management, digital audience measurement, voice and analytics services and business transformation solutions. The pandemic reshaped how these firms operate and interact with clients. In response, the industry's current emphasis is on streamlining operations through digital transformation, technology integration, data-driven strategies and stronger cybersecurity. As the economy recovers, service providers are actively refining their strategic approaches to capitalize on emerging opportunities. This involves reassessing business priorities, pinpointing growth drivers, and targeting specific end markets to remain competitive and agile in a transformed business landscape.

What's Shaping the Future of the Business Services Industry?

Strong Service Activities: The sector continues to draw strength from sustained and evolving service-driven activity. In December, the Services PMI, as reported by the Institute for Supply Management, came in at 54.4%, closing out 2025 on a strong note with its 10th month of expansion and the highest reading recorded during the year.

Demand Stability: Having evolved into a mature and resilient ecosystem, the industry continues to experience consistent demand for its services. In this post-pandemic era, revenues, operating income and cash flows have not only recovered but surpassed pre-pandemic levels. This financial strength will position most industry players to sustain dividend payouts, reinforcing long-term investor confidence in a structurally sound and future-ready sector.

AI Advancement: The rapid advancement and adoption of artificial intelligence and automation technologies are reshaping how business services are delivered. While these innovations promise enhanced efficiency, cost reduction and faster turnaround times, they also pose challenges such as workforce displacement and the need for constant upskilling. Companies that effectively integrate AI while managing the human impact will likely lead the future of the industry.

Zacks Industry Rank Indicates Solid Near-Term Prospects

The Business-Services industry is housed within the broader Business Services sector. It carries a Zacks Industry Rank #84, which places it in the top 34% of 244 Zacks industries.

The group’s Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates solid near-term growth prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and current valuation.

Industry's Price Performance

The Zacks Business Services industry has underperformed the broader sector and the S&P 500 over the past 12 months.

The industry has declined 14% compared with the S&P 500 composite’s growth of 17% and the broader sector’s 13% drop.

One-Year Price Performance

Industry's Current Valuation

Price to Forward 12-Month P/E Ratio

 

Based on the forward 12-month price-to-earnings (P/E) ratio, which is commonly used for valuing business-services stocks, the industry is currently trading at 17.95X compared with the S&P 500’s 23.28X and the sector’s 20.1X.

Over the past five years, the industry has traded as high as 26.62X and as low as 17.95X, with the median being 23.36X, as the charts below show.

3 Service Stocks in Focus

We have presented three stocks that are well-positioned to grow in the near term.

Wolters Kluwer: This provider of professional information, software solutions and services is benefiting from steady execution and strengthening momentum across key growth engines. The company delivered solid organic growth over the first nine months of 2025, with an acceleration in the third quarter driven by its Health, Tax & Accounting, and Corporate Performance & ESG segments. This pickup underscores resilient demand for its mission-critical solutions and the effectiveness of its product strategy.

Continued investment in cloud-native, integrated platforms positions WTKWY well for scalable, long-term growth, while the launch of advanced AI enhancements reinforces its leadership in intelligent workflow solutions. Additionally, recent partnerships and acquisitions are progressing well, expanding capabilities and market reach. Management’s confidence, reflected in the reaffirmation of full-year guidance, further signals operational stability and clear visibility into ongoing growth trends.

The Zacks Consensus Estimate for 2025 bottom line has increased nearly 1% to $6.85 in the past 60 days. APG shares have gained 36% in the past year.

WTKWY currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

APi Group: This provider of safety and specialty services worldwide expects strong momentum across its global platform in 2026, reflecting the durability and scalability of its operating model.

The company is accelerating organic growth while expanding adjusted EBITDA margins, signaling improving operating leverage. Growth in recurring inspection, service, and monitoring revenues enhances earnings visibility and business stability, while a record backlog provides a solid runway for future growth. Improving free cash flow generation further strengthens financial flexibility and supports disciplined capital allocation. APi’s inspection and service-first strategy, combined with purpose-driven leadership, positions the company for sustained organic growth and margin expansion. Management’s confidence in achieving its new 10/16/60+ financial targets underscores execution strength and reinforces APi Group’s long-term value creation potential for shareholders.

APG currently sports a Zacks Rank #2. The Zacks Consensus Estimate for 2025 bottom line has increased marginally to $1.44 in the past 60 days.

Rentokil: This essential hygiene, pest control, and workplace services provider is executing steadily and continues to progress across its key markets. The company benefited from ongoing improvements in sales execution and an evolving digital marketing strategy, which have driven stronger lead generation and overall sales momentum in North America.

Its satellite branch expansion remains on schedule, while the gradual integration of commercial branches and ongoing cost efficiency initiatives underline disciplined management. Together, these actions demonstrate Rentokil’s ability to strengthen its competitive position, enhance operational effectiveness and sustain growth momentum across both its North American and international businesses.

RTO carries a Zacks Rank #2. The Zacks Consensus Estimate for 2025 EPS has increased 1.4% to $1.44 in the past 60 days.