Shares of facility services provider ABM Industries (NYSE:ABM) fell 3% in the afternoon session after the stock continued to decline as the company reported fiscal third-quarter earnings that missed analyst expectations and narrowed its full-year profit outlook.
Shares of facility services provider ABM Industries (NYSE:ABM) fell 4.6% in the morning session after the company reported second-quarter results that missed Wall Street's earnings expectations, and its full-year forecast fell short of analyst estimates.
ABM Industries (ABM) reported Q3 revenue of $2.22B, beating estimates, but adjusted EPS of $0.82 missed projections. Shares fell as the company guided toward the lower end of its full-year outlook.
Facility services provider ABM Industries (NYSE:ABM) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 6.2% year on year to $2.22 billion. Its non-GAAP profit of $0.82 per share was 13.6% below analysts’ consensus estimates.
While profitability is essential, it doesn’t guarantee long-term success.
Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
A number of stocks jumped in the afternoon session after the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Business services providers use their specialized expertise to help enterprises streamline operations and cut costs. But increasing competition from AI-driven upstarts has tempered enthusiasm,
and over the past six months, the industry has pulled back by 4.1%. This performance was discouraging since the S&P 500 returned 5.2%.
Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune by purchasing wonderful businesses at reasonable prices.
But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues.
Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on.
However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
