What Happened?
A number of stocks jumped in the afternoon session after the ISM Services PMI Report showed the business services sector continued to expand in June.
The Institute for Supply Management (ISM) reported that its Services PMI® registered 54 percent. While this is a slight decrease of 0.5 percentage point from May's reading of 54.5 percent, it marks the 24th consecutive month of growth for the sector. A PMI reading above 50 percent indicates that the services sector economy is generally expanding. The sustained period of expansion suggests a resilient economic backdrop for service-oriented companies, signaling healthy business activity and demand.
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:
- Business Process Outsourcing & Consulting company TaskUs (NASDAQ: TASK) jumped 3.9%. Is now the time to buy TaskUs? Access our full analysis report here, it’s free.
- Government & Technical Consulting company Amentum (NYSE: AMTM) jumped 3.9%. Is now the time to buy Amentum? Access our full analysis report here, it’s free.
- Specialized Technology company Napco (NASDAQ: NSSC) jumped 3.6%. Is now the time to buy Napco? Access our full analysis report here, it’s free.
- Industrial & Environmental Services company Tetra Tech (NASDAQ: TTEK) jumped 4.5%. Is now the time to buy Tetra Tech? Access our full analysis report here, it’s free.
Zooming In On Tetra Tech (TTEK)
Tetra Tech’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock gained 16.2% on the news that the company reported third-quarter results that significantly beat Wall Street's expectations for both revenue and profit.
The company reported revenue of $1.23 billion, which was 17.3% higher than the $1.05 billion analysts had estimated. Its earnings per share of $0.48 also came in 18.5% above the consensus forecast.
Looking ahead, while Tetra Tech's revenue forecast for the next quarter was largely in line with expectations, its guidance for the upcoming fiscal year's earnings was a significant positive. The company projected earnings of $1.48 per share at the midpoint, beating analyst estimates. This strong forward-looking profitability appears to have overshadowed any near-term concerns, driving a wave of buying from investors.
Tetra Tech is down 7.2% since the beginning of the year, and at $31.24 per share, it is trading 26.7% below its 52-week high of $42.61 from February 2026. Despite the year-to-date decline, investors who bought $1,000 worth of Tetra Tech’s shares 5 years ago would now be looking at an investment worth $1,249.
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