Reflecting on second-quarter 2026, the U.S. services sector furthered its expansion. Per a report published in June by the Institute for Supply Management, the Services PMI checked in at 54%, closing the aforesaid quarter powering forward with its 24th consecutive month in expansion territory.
According to the latest data from the Bureau of Economic Analysis, real GDP moved up at an annual rate of 1.5% during the April-June period of 2026. This growth is achieved amidst inflationary pressure induced by the Persian Gulf conflict, precarious trade policy and high fiscal debt, driven by sustained budget deficits.
The services sector’s steady performance underlines the adaptability of the U.S. economy, facilitated by sustained consumer demand. Service industries, including transportation and warehousing, finance and insurance, retail trade, accommodation and food services, rental and leasing and health care and social assistance, showed resilience and sound activity by the end of the quarter. However, multiple industries showed weakness, including educational services, public administration, management of companies and support services, and agriculture, forestry, fishing and hunting.
Overall, the mixed momentum demonstrates the U.S. services sector continuing to anchor economic growth, with underlying disparities between industries highlighting the economy’s persistent transition toward a more balanced and sustainable expansion.
Some service providers are set to report their earnings results over the next few weeks. We have picked four stocks, Duolingo DUOL, Dave DAVE, Thomson Reuters TRI and Coherent Corp. COHR, which are well-positioned to beat earnings estimates this time around.
Stocks Poised to Beat This Season
With the existence of several players in the sector, finding the right business services stocks that have the potential to beat on earnings can be daunting. Our proprietary methodology, however, makes it fairly simple.
You could narrow down the list of choices by looking at stocks that have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks that have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%.
Here are our picks.
Other Stocks to Consider
Here are a few stocks from the broader Business Services sector, which, according to our model, also have the right combination of elements to beat on earnings this season.
Duolingo: It has an Earnings ESP of +9.02% and a Zacks Rank of 2. The company is scheduled to declare second-quarter 2026 results on Aug. 5. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $297.4 billion, suggesting a 17.9% jump from the year-ago quarter’s actual. For earnings, the consensus mark is set at 61 cents per share, a 33% plunge from the year-ago quarter’s actual. DUOL beat the consensus estimate in the trailing four quarters, with an average surprise of 32.3%.
Duolingo, Inc. Price and EPS Surprise
Duolingo, Inc. price-eps-surprise | Duolingo, Inc. Quote
Thomson Reuters: The Zacks Consensus Estimate for second-quarter 2026 revenues is pinned at $1.9 billion, marking 7.3% growth from the year-ago quarter’s actual. For earnings, the consensus mark is at 96 cents per share, indicating 9.1% growth from the year-ago quarter’s reported number. TRI surpassed the consensus estimate in the trailing four quarters, with an average beat of 3.1%.
It has an Earnings ESP of +2.53% and a Zacks Rank of 2 at present. TRI is scheduled to declare results on Aug. 5.
Thomson Reuters Corp Price and EPS Surprise
Thomson Reuters Corp price-eps-surprise | Thomson Reuters Corp Quote
Dave: The company currently has an Earnings ESP of +1.42% and a Zacks Rank of 2. Dave is scheduled to declare second-quarter 2026 results on Aug. 5.
The Zacks Consensus Estimate for DAVE’s revenues is kept at $169.8 million, suggesting 28.9% year-over-year growth. The consensus estimate for earnings is pegged at $3.69 per share, implying a year-over-year increase of 17.5%. Dave beat the consensus estimate in the trailing four quarters, delivering an average earnings surprise of 45.8%.
Dave Inc. Price and EPS Surprise
Dave Inc. price-eps-surprise | Dave Inc. Quote
Coherent: The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues is set at $2 billion, suggesting a 30.3% jump from the year-ago quarter’s actual. For earnings, the consensus mark is pegged at $1.62 per share, implying a 62% surge from the year-ago quarter’s reported number. COHR surpassed the consensus estimate in the trailing four quarters, with an average beat of 6.2%.
It has an Earnings ESP of +2.65% and a Zacks Rank of 2 at present. COHR is scheduled to declare results on Aug. 12.
Coherent Corp. Price and EPS Surprise
Coherent Corp. price-eps-surprise | Coherent Corp. Quote
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Thomson Reuters Corp (TRI): Free Stock Analysis Report
Dave Inc. (DAVE): Free Stock Analysis Report
Coherent Corp. (COHR): Free Stock Analysis Report
Duolingo, Inc. (DUOL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).