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On Oct 12, Zacks Investment Research updated the research report on business services provider ABM Industries Incorporated (ABM - Free Report) .

Headquartered in San Francisco, CA, ABM provides engineering, janitorial, parking, and facility solutions to commercial, industrial, institutional, and retail facilities. ABM has developed a platform to deliver an end-to-end service model to its clients by realigning its operational structure to an on-site, mobile and on-demand market based structure. This realignment has improved its long-term growth prospects and provides higher margin opportunities by enabling it to better deliver end-to-end services to its clients across urban, suburban and rural areas. The company further expects to extend its global footprint and strengthen its position in existing markets through both inorganic and organic growth across the industry verticals.

The company has embarked on a Vision 2020 Plan that outlines its vision for the next five years and hinges on three primary phases, the first of which is aimed to increase the efficiency of the company through diligent execution of the operating plan and stringent cost-reduction activities. The second phase will focus on driving growth across the realigned verticals through effective realization of the cost savings from procurement, account management and other organizational changes. The final phase of the transformation will include accelerated growth impetus from the vertical alignment and account planning systems with a continuous focus on additional cost savings.

ABM is currently focusing on the second phase of the plan and remains confident of achieving $40–$50 million in savings through operational efficiencies by the end of 2017. These systematic and strategic plan of actions are likely to help ABM to fuel its growth momentum.

With strong third-quarter fiscal 2016 results and steady progress in its Vision 2020 plan, ABM has also updated its fiscal 2016 guidance. For fiscal 2016, ABM expects adjusted income from continuing operations in the range of $1.70–$1.75, up from $1.55–$1.65 expected earlier. The increased guidance is primarily due to the recognition of certain discrete tax items and higher-than-expected 2020 Vision savings.

We remain encouraged by the inherent growth potential of this Zacks Rank #1 (Strong Buy) stock. Some other favorably ranked stocks in the industry include Carbonite, Inc. (CARB - Free Report) , LogMeIn, Inc. (LOGM - Free Report) and Cintas Corporation (CTAS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Carbonite has a long-term earnings growth expectation of 30% and is currently trading at a forward P/E of 96.3x. Carbonite has a stellar earnings surprise history with an average positive earnings surprise of 80.1% in the trailing four quarters, comprehensively beating estimates in each quarter.

LogMeIn has a long-term earnings growth expectation of 22.5% and is currently trading at a forward P/E of 99.2x. LogMeIn has a healthy earnings surprise history with an average positive earnings surprise of 55.7% in the trailing four quarters, beating estimates in each quarter.

Cintas has a long-term earnings growth expectation of 11% and is currently trading at a forward P/E of 24.1x. Cintas has a modest earnings surprise history with an average positive earnings surprise of 5.5% in the trailing four quarters, beating estimates in each quarter.

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