Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. But increasing competition from AI-driven upstarts has tempered enthusiasm, and over the past six months, the industry has pulled back by 3.3%. This performance was similar to the S&P 500’s decline.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. With that said, here is one services stock poised to generate sustainable market-beating returns and two we’re steering clear of.

Two Business Services Stocks to Sell:

ASGN (ASGN)

Market Cap: $2.78 billion

Evolving from its roots in IT staffing to become a high-end technology consulting powerhouse, ASGN (NYSE:ASGN) provides specialized IT consulting services and staffing solutions to Fortune 1000 companies and U.S. federal government agencies.

Why Do We Think ASGN Will Underperform?

1. Annual sales declines of 5.4% for the past two years show its products and services struggled to connect with the market during this cycle

2. Sales are projected to be flat over the next 12 months and imply weak demand

3. Sales were less profitable over the last two years as its earnings per share fell by 10.7% annually, worse than its revenue declines

At $63.02 per share, ASGN trades at 11.3x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than ASGN .

CBIZ (CBZ)

Market Cap: $4.01 billion

With over 120 offices across 33 states and a team of more than 6,700 professionals, CBIZ (NYSE:CBZ) provides accounting, tax, benefits, insurance brokerage, and advisory services to help small and mid-sized businesses manage their finances and operations.

Why Is CBZ Not Exciting?

1. Earnings per share have contracted by 22.3% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance

2. Free cash flow margin shrank by 7.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

3. 10× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

CBIZ’s stock price of $75.86 implies a valuation ratio of 2.5x trailing 12-month price-to-sales. To fully understand why you should be careful with CBZ, check out our full research report (it’s free) .

One Business Services Stock to Buy:

Pure Storage (PSTG)

Market Cap: $14.43 billion

Founded in 2009 as a pioneer in enterprise all-flash storage technology, Pure Storage (NYSE:PSTG) provides all-flash data storage hardware and software that helps organizations manage their data more efficiently across on-premises and cloud environments.