Is Spotify Technology Stock Outpacing Its Business Services Peers This Year?

For those looking to find strong Business Services stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Spotify SPOT one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Business Services peers, we might be able to answer that question.

Spotify is a member of the Business Services sector. This group includes 316 individual stocks and currently holds a Zacks Sector Rank of #5. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Spotify is currently sporting a Zacks Rank of #1 (Strong Buy).

Over the past three months, the Zacks Consensus Estimate for SPOT's full-year earnings has moved 39.5% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.

Based on the latest available data, SPOT has gained about 64.9% so far this year. Meanwhile, the Business Services sector has returned an average of 6.7% on a year-to-date basis. As we can see, Spotify is performing better than its sector in the calendar year.

Paymentus PAY is another Business Services stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 8.2%.

In Paymentus' case, the consensus EPS estimate for the current year increased 11.5% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Looking more specifically, Spotify belongs to the Technology Services industry, which includes 173 individual stocks and currently sits at #68 in the Zacks Industry Rank. On average, this group has gained an average of 20.7% so far this year, meaning that SPOT is performing better in terms of year-to-date returns. Paymentus is also part of the same industry.

Spotify and Paymentus could continue their solid performance, so investors interested in Business Services stocks should continue to pay close attention to these stocks.

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