Nyse Order Imbalance 343706.0 Shares On Buy Side

What Happened?

A number of stocks fell in the afternoon session after geopolitical tensions between the United States and the European Union escalated, sparking fears of a renewed trade war. 

The broader markets adopted a "risk-off" mode, with investors seeking safe-haven assets amidst the uncertainty. The market's primary fear gauge, the VIX, jumped to a fresh eight-week high, signaling rising investor anxiety. The dispute, centered on Greenland, raised the possibility of a revived trade conflict, which could disrupt global supply chains and economic activity. Mega-cap technology stocks, many of which have significant international sales and operations, were particularly affected by the souring risk sentiment as a potential trade war threatens their global business models.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Digital Media & Content Platforms company WEBTOON fell 1.8%. Is now the time to buy WEBTOON? Access our full analysis report here, it’s free.
• Industrial & Environmental Services company Pitney Bowes fell 3.3%. Is now the time to buy Pitney Bowes? Access our full analysis report here, it’s free.
• IT Services & Consulting company IBM fell 3.2%. Is now the time to buy IBM? Access our full analysis report here, it’s free.
• IT Services & Consulting company DXC fell 1.8%. Is now the time to buy DXC? Access our full analysis report here, it’s free.
• Professional Staffing & HR Solutions company First Advantage fell 4%. Is now the time to buy First Advantage? Access our full analysis report here, it’s free.

Zooming In On First Advantage (FA)

First Advantage’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 9.8% on the news that the company reported third-quarter financial results that surpassed analyst expectations and provided an encouraging full-year outlook. 

The background screening services provider posted revenue of $409.2 million for the quarter, a significant 105% year-on-year jump that beat Wall Street's forecast. Adjusted earnings were $0.30 per share, also topping estimates. 

In addition to the strong quarterly performance, First Advantage raised its guidance for the full year 2025. The company announced it now expects revenues with a midpoint of $1.55 billion and adjusted earnings per share with a midpoint of $1.00. This update signaled management's confidence in the business's trajectory.

First Advantage is up 1.7% since the beginning of the year, but at $14.50 per share, it is still trading 27.6% below its 52-week high of $20.01 from February 2025. Investors who bought $1,000 worth of First Advantage’s shares at the IPO in June 2021 would now be looking at an investment worth $735.79.

Over the past six months, Pitney Bowes’s stock price fell to $10.60. Shareholders have lost 12.4% of their capital, which is disappointing considering the S&P 500 has climbed by 10.4%. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation.

Why Is Pitney Bowes Not Exciting?

Even with the cheaper entry price, we're swiping left on Pitney Bowes for now. Here are three reasons we avoid PBI and a stock we'd rather own.

1. Revenue Spiraling Downwards

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Pitney Bowes’s demand was weak and its revenue declined by 10.5% per year. This wasn’t a great result and signals it’s a lower quality business.

2. Revenue Projections Show Stormy Skies Ahead

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Pitney Bowes’s revenue to drop by 4%. Although this projection is better than its two-year trend, it’s tough to feel optimistic about a company facing demand difficulties.

3. Mediocre Free Cash Flow Margin Limits Reinvestment Potential

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Pitney Bowes has shown weak cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 3.7%, subpar for a business services business.

Final Judgment

Pitney Bowes isn’t a terrible business, but it doesn’t pass our quality test. Following the recent decline, the stock trades at 7.4× forward P/E (or $10.60 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're pretty confident there are more exciting stocks to buy at the moment. We’d recommend looking at a safe-and-steady industrials business benefiting from an upgrade cycle.

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Tetra Tech and the best and worst performers in the industrial & environmental services industry.

Growing regulatory pressure on environmental compliance and increasing corporate ESG commitments should buoy the sector for years to come. On the other hand, environmental regulations continue to evolve, and this may require costly upgrades, volatility in commodity waste and recycling markets, and labor shortages in industrial services. As for digitization, a theme that is impacting nearly every industry, the increasing use of data, analytics, and automation will give rise to improved efficiency of operations. Conversely, though, the benefits of digitization also come with challenges of integrating new technologies into legacy systems.

The 8 industrial & environmental services stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 1.6% on average since the latest earnings results.

Best Q3: Tetra Tech

With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide.

Tetra Tech reported revenues of $1.16 billion, up 1.6% year on year. This print exceeded analysts’ expectations by 10.7%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS and revenue estimates.

Dan Batrack, Chairman and CEO, commented, “We finished fiscal 2025 with another strong quarter resulting in record net revenue, record operating income, and significant operating margin expansion. These all-time high results were driven by the continued strong demand for our differentiated high-end consulting services in resilient water management and digital water automation. Our strategy focused on essential water and environmental services has allowed us to successfully navigate the recent changes in U.S. federal government priorities as we achieved record financial performance for 2025.”

Tetra Tech achieved the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 3.7% since reporting and currently trades at $33.64.

Driven Brands

With approximately 5,000 locations across 49 U.S. states and 13 other countries, Driven Brands operates a network of automotive service centers offering maintenance, car washes, paint, collision repair, and glass services across North America.

Driven Brands reported revenues of $484.3 million, down 3.6% year on year, falling short of analysts’ expectations by 9.9%. However, the business still had a strong quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.

The market seems content with the results as the stock is up 1.7% since reporting. It currently trades at $14.50.

Weakest Q3: Vestis

Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.

Vestis reported revenues of $686.2 million, flat year on year, exceeding analysts’ expectations by 2.1%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 2.2% since the results and currently trades at $6.57.

Read our full analysis of Vestis’s results here.

ABM

With roots dating back to 1909 as a window washing company, ABM Industries provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.

ABM reported revenues of $2.30 billion, up 5.4% year on year. This result surpassed analysts’ expectations by 1%. More broadly, it was a slower quarter as it logged a significant miss of analysts’ EPS estimates and full-year EPS guidance in line with analysts’ estimates.

The stock is down 6.7% since reporting and currently trades at $42.68.

Read our full, actionable report on ABM here, it’s free for active Edge members.

Pitney Bowes

With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.

Pitney Bowes reported revenues of $459.7 million, down 8% year on year. This number missed analysts’ expectations by 1.7%. Overall, it was a slower quarter as it also produced a miss of analysts’ revenue estimates and EPS in line with analysts’ estimates.

Pitney Bowes achieved the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is down 7.8% since reporting and currently trades at $10.34.

Read our full, actionable report on Pitney Bowes here, it’s free for active Edge members.