Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. But cutbacks in corporate spending and the threat of new AI products have kept sentiment in check, and over the past six months, the industry has tumbled by 1.4%. This performance mirrored the S&P 500’s.

Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. On that note, here are two services stocks boasting durable advantages and one best left ignored.

One Business Services Stock to Sell:

Korn Ferry (KFY)

Market Cap: $3.44 billion

With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE:KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.

Why Is KFY Risky?

1. Sales tumbled by 2% annually over the last two years, showing market trends are working against its favor during this cycle

2. Sales were less profitable over the last two years as its earnings per share fell by 8.1% annually, worse than its revenue declines

3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Korn Ferry is trading at $66.60 per share, or 13x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than KFY .

Two Business Services Stocks to Watch:

Barrett (BBSI)

Market Cap: $1.05 billion

Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ:BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.

Why Do We Like BBSI?

1. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient

2. ROIC punches in at 57.4%, illustrating management’s expertise in identifying profitable investments, and its returns are climbing as it finds even more attractive growth opportunities

3. Returns on capital are growing as management capitalizes on its market opportunities

At $40.46 per share, Barrett trades at 18.2x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free .

Huron (HURN)

Market Cap: $2.31 billion

Founded in 2002 during a time of significant regulatory change in corporate America, Huron Consulting Group (NASDAQ:HURN) is a professional services company that helps organizations develop growth strategies, optimize operations, and implement digital transformation solutions.