The U.S. business services sector has performed well supported by strong fundamentals of the domestic economy. The latest example is the blowout labor market data for December. The economy added 256,000 jobs surpassing the consensus estimate of 156,000 and November’s data of 221,000. The unemployment rate fell to 4.1% in December from 4.2% in the prior month.

Moreover, the U.S. GDP grew at the rate of 1.6%, 3% and 3.1%, respectively, in the first three quarters of 2024. On Jan 9, the Atlanta Fed GDPNow tracker projected the economy to advance at 2.7% in the fourth quarter of 2024. 

At this stage, it would be fruitful to invest in business services stocks with a favorable Zacks Rank. Five such stocks are: HireQuest Inc. HQI, Heidrick & Struggles International Inc. HSII, Booz Allen Hamilton Holding Corp. BAH, CRA International Inc. CRAI and SPS Commerce Inc. SPSC.

Business Services Sector Holds Ground

The staffing industry comprises companies that provide a wide range of services related to human resources, and workforce solutions and services. Of late, the industry has been witnessing growth in revenues and income. The fundamentals of the U.S. economy remain firm leading to huge hiring and wage increases.

The key focus within the consulting industry is currently on channeling money and efforts toward more effective operational components, such as technology, digital transformation and data-driven decision-making.

The business services industry is benefiting from robust demand for multi-cloud-enabled software solutions, given the ongoing transition from legacy platforms to modern cloud-based infrastructure. Industry players are incorporating artificial intelligence and tools like machine learning into their applications to make the same more dynamic and result-oriented. 

5 Business Services Stocks to Buy for Short-Term Gains

We have narrowed our search to five business services stocks that have strong growth potential for 2025. These stocks have seen positive earnings estimate revisions in the last 60 days. These stocks have strong upside potential in the near term. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks in the past year.

Image Source: Zacks Investment Research

HireQuest Inc. 

Zacks Rank #1 HireQuest provides temporary staffing services in the United States. HQI serves construction, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, and retail industries, and dental practices.

HQI offers staffing services, including direct-dispatch, executive search, consultant, unskilled and semi-skilled industrial and construction personnel, clerical and administrative personnel, and permanent placement services, as well as commercial and non-CDL drivers, and skilled personnel in the medical and dental industries. 

Huge Price Upside Potential for HQI Stock

HireQuest has an expected revenue and earnings growth rate of 8.7% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.4% over the last 60 days. 

The average short-term price target of brokerage firms represents an increase of 45.8% from the last closing price of $13.34. The brokerage target price is currently in the range of $18 to $20. This indicates a maximum upside of 49.9% and no downside. 

Heidrick & Struggles International Inc.

Zacks Rank #2 Heidrick & Struggles International is one of the leading global executive search firms. With years of experience in fulfilling their clients' leadership needs, HSII offers and conducts executive search services in every major business center in the world. 

HSII is the premier provider of senior-level Executive Search, Culture Shaping and Leadership Consulting services. HSII is focused on quality service and building strong leadership teams through their relationships with clients and individuals worldwide.

Solid Price Upside Potential for HSII Shares

Heidrick & Struggles International has an expected revenue and earnings growth rate of 3.2% and 8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. 

The average short-term price target of brokerage firms represents an increase of 9% from the last closing price of $45.48. The brokerage target price is currently in the range of $42 to $53. This indicates a maximum upside of 16.5% and a downside risk of 7.7%.

Booz Allen Hamilton Holding Corp.

Zacks Rank #2 Booz Allen Hamilton Holding offers a solid investment option for those seeking stability, as the business is driven by long-term government contracts, and a strong reputation in defense and cybersecurity. BAH’s focus on operational efficiency, investments in artificial intelligence and cybersecurity has positioned it for sustainable growth. 

BAH is benefiting from its Vision 2020 strategy, which has accelerated organic revenue growth, strengthened its profitability and fetched significant headcount and backlog growth. BAH’s VoLT strategy focuses on integrating velocity, leadership and technology in the process of transformation. 

Impressive Price Upside Potential for BAH Stock

Booz Allen Hamilton Holding has an expected revenue and earnings growth rate of 12.6% and 13.6%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.6% in the last 60 days.

The average short-term price target of brokerage firms represents an increase of 15.6% from the last closing price of $136.14. The brokerage target price is currently in the range of $135 to $210. This indicates a maximum upside of 54.3% and a downside of 0.8%.

CRA International Inc.

Zacks Rank #2 CRA International has a highly qualified employee base, which helps it attract new clients. Collaborations with academic experts further enhance CRAI’s expertise and help it build solid client relationships. 

CRAI’s Presence across North America and Europe is encouraging because these markets cater to diverse industries, thus representing attractive growth opportunities. CRAI also returns value to shareholders through dividends and share repurchases. 

Excellent Price Upside Potential for CRAI Shares

CRA International has an expected revenue and earnings growth rate of 2.9% and 5.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.7% in the last 60 days.

The average short-term price target of brokerage firms represents an increase of 17.7% from the last closing price of $182.77. The brokerage target price is currently in the range of $210 to $212. This indicates a maximum upside of 16% and no downside.

SPS Commerce Inc.

Zacks Rank #1 SPS Commerce is a provider of on-demand supply chain management solutions, providing integration, collaboration, connectivity, visibility and data analytics to its customers worldwide. SPSC delivers its solutions over the Internet using a Software-as-a-Service model to improve the way suppliers, retailers, distributors and other customers manage and fulfill orders. 

SPSC’s delivery model also enables it to offer greater functionality, integration and reliability with less cost and risk than traditional solutions. SPSC provides solutions through SPSCommerce.net, a hosted software. 

Robust Price Upside Potential for SPSC Stock

SPS Commerce has an expected revenue and earnings growth rate of 17.9% and 14.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% in the last 30 days.

The average short-term price target of brokerage firms represents an increase of 23.6% from the last closing price of $179.33. The brokerage target price is currently in the range of $188 to $245. This indicates a maximum upside of 36.6% and a downside of 4.8%.

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Charles River Associates (CRAI) : Free Stock Analysis Report

Booz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report

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