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RCM (RCMT) (RCMT)
:RCMT
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Rcm Technologies
(NASDAQ:RCMT)
Rating:72Outperform
Price Target:
$24.00
▲(4.90%Upside)
Positive Factors
Financial Management
Cash improved in 4Q with lower DSO and is expected to improve further, indicating better financial management.
Revenue Growth
New business pipelines are expanding for all segments, with Specialty Healthcare expected to support 15%+ revenue growth.
Negative Factors
Adjusted EBITDA
Adjusted EBITDA was down 30% year over year due to lighter-than-forecast revenue and higher expenses.
Gross Profit
The 4Q gross profit was negatively impacted by a lower gross margin in Engineering Services due to a higher mix of lower margin engagements and one-time issues.
Rcm Technologies (RCMT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$169.09M
Dividend YieldN/A
Average Volume (3M)33.94K
Price to Earnings (P/E)13.2
Beta (1Y)0.67
Revenue Growth8.53%
EPS Growth-16.64%
CountryUS
Employees4,220
SectorIndustrials
Sector Strength90
IndustryConglomerates
Share Statistics
EPS (TTM)0.63
Shares Outstanding7,390,385
10 Day Avg. Volume38,373
30 Day Avg. Volume33,935
Financial Highlights & Ratios
PEG Ratio4.44
Price to Book (P/B)5.09
Price to Sales (P/S)0.00
P/FCF Ratio-79.21
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue0.18
Enterprise Value/Gross Profit2.41
Enterprise Value/Ebitda1.96
Forecast
1Y Price Target
$30.00Price Target Upside31.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Rcm Technologies Business Overview & Revenue Model
Company DescriptionRCM Technologies, Inc. provides business and technology solutions in the United States, Canada, Puerto Rico, and Serbia. It operates through three segments: Engineering, Specialty Health Care, and Life Sciences and Information Technology. The Engineering segment offers a range of engineering services, including project management engineering and design, engineering analysis, engineer-procure-construct, configuration management, hardware/software validation and verification, quality assurance, technical writing and publications, manufacturing process planning and improvement, and 3D/BIM integrated design. The Specialty Health Care segment provides long-term and short-term staffing, executive search, and placement services in the fields of allied and therapy staffing, correctional healthcare staffing, health information management, nursing services, physician and advanced practice, school services, and telepractice. The Life Sciences and Information Technology segment provides enterprise business solutions, application services, infrastructure solutions, competitive advantage, life sciences solutions, and other vertical market specific solutions. The company serves aerospace and defense, energy, financial services, health care, life sciences, manufacturing and distribution, and technology industries, as well as educational institutions and the public sector. RCM Technologies, Inc. was founded in 1971 and is based in Pennsauken, New Jersey.
How the Company Makes MoneyRCM Technologies makes money primarily through its staffing and consulting services, generating revenue by providing skilled professionals and technical solutions to meet the unique needs of its clients. The company earns fees for contract staffing, direct placement, and managed service provider programs. In addition to staffing, RCM Technologies offers project-based consulting services, where it charges for delivering technology, engineering, and business solutions tailored to client specifications. Strategic partnerships and long-term client relationships play a crucial role in sustaining and growing its revenue streams, enabling RCM Technologies to maintain a steady flow of projects and engagements across various sectors.
Rcm Technologies Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 27.61%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive sentiment, with strong performance and growth reported across most business segments, particularly in Health Care, Aerospace, and Engineering. However, there were some challenges noted in the IT, Life Sciences, and Data Solutions segment, and volatility in Engineering gross margins.Q1-2025 Updates
Positive Updates
Strong Start for Health Care Segment
RCM's Health Care segment reported a 16.7% growth in school revenue for Q1 2025 compared to Q1 2024, with a gross profit increase of 10.2% and strategic expansion in behavioral health and new school contracts.
Life Sciences and Data Solutions Growth
The division posted a 40% gross profit and a 23% NOI contribution, with significant advancements in AI/ML deployments and six new clients acquired in 2025.
Engineering Achievements
Engineering gross profit grew by 12.4% compared to Q1 2024, achieving the best engineering gross profit quarter in company history, driven by preferred partner agreements and energy services.
Aerospace and Defense Success
The Aerospace Group exceeded Q1 2025 business plan objectives by over 20% on revenue and 19% on EBITDA, with a 47% increase in revenue compared to Q1 2024, and a 247% increase in EBITDA.
Financial Performance
Consolidated gross profit grew 7.9% over Q1 2024, marking the highest gross profit over the past 12 quarters. Adjusted EBITDA grew 14.4%, and adjusted EPS increased by 18.9%.
Negative Updates
IT, Life Sciences and Data Solutions Decline
Gross profit for Q1 2025 in this segment declined by 5.3% compared to Q1 2024, indicating challenges despite overall positive performance in other areas.
Engineering Gross Margin Volatility
Engineering gross margin declined from 23.4% in Q1 2024 to 19.2% in Q1 2025, affected by significant pass-through construction revenue and lower-margin Aerospace growth.
Company Guidance
During the call, RCM Technologies provided guidance indicating strong growth and performance metrics across its business segments for the first quarter of 2025. The company reported a consolidated gross profit of $22.0 million, marking a 7.9% increase from Q1 2024, with adjusted EBITDA growing by 14.4% to $7.8 million. Notably, the health care segment saw a 10.2% increase in gross profit to $12.2 million, driven by a 16.7% rise in school revenue. The engineering division achieved its best gross profit quarter with a 12.4% increase to $6.2 million, although margins were affected by pass-through construction revenue. The IT, Life Sciences, and Data Solutions segment experienced a slight decline in gross profit by 5.3% but maintained a strong gross margin of 39.7%. Additionally, the company reduced net debt by $12.0 million and generated $16.7 million in cash flow from operations. RCM expects to continue delivering at least low double-digit growth in adjusted EBITDA throughout fiscal 2025, with Q4 anticipated to be the highest EBITDA quarter of the year.Rcm Technologies Financial Statement Overview
Summary
RCM Technologies exhibits operational efficiency with strong EBIT and EBITDA margins despite decreased revenue and net income. The balance sheet shows no leverage, potentially limiting growth, but the company maintains positive cash flows, indicating solid liquidity management.Income Statement
Rcm Technologies shows a stable gross profit margin and a positive EBIT margin in the TTM, with a slight decrease in net profit and revenue compared to the previous year. Despite this, the EBIT and EBITDA margins remain healthy, indicating operational efficiency.70
Positive
Balance Sheet
The balance sheet reveals a significant drop in stockholders' equity and no reported debt in the TTM, which indicates a zero debt-to-equity ratio. However, this could reflect a lack of financial leverage, potentially limiting growth. The equity ratio has decreased, impacting financial stability.45
Neutral
Cash Flow
The cash flow statement indicates a decline in free cash flow but a positive operating cash flow to net income ratio. While free cash flow has decreased, the company maintains a positive cash flow from operations, which is crucial for sustaining business operations.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 290.91M | 278.38M | 263.24M | 284.68M | 203.88M | 150.41M | Gross Profit |
| 81.39M | 79.78M | 76.70M | 82.93M | 53.12M | 38.85M | EBIT |
| 23.07M | 22.32M | 23.69M | 28.80M | 5.87M | 10.31M | EBITDA |
| 25.20M | 24.51M | 24.51M | 29.53M | 6.97M | -9.89M | Net Income Common Stockholders |
| 13.56M | 13.33M | 16.83M | 20.89M | 10.99M | -8.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 642.00K | 4.73M | 6.28M | 339.00K | 235.00K | 734.00K | Total Assets |
| 83.95M | 132.08M | 120.48M | 87.96M | 72.85M | 68.34M | Total Debt |
| 38.96M | 42.18M | 34.00M | 13.76M | 18.22M | 16.77M | Net Debt |
| 38.32M | 37.45M | 27.71M | 13.42M | 17.99M | 16.04M | Total Liabilities |
| 57.41M | 98.59M | 94.69M | 56.00M | 46.88M | 46.10M | Stockholders Equity |
| 26.54M | 33.48M | 25.79M | 31.96M | 25.97M | 22.24M |
| Cash Flow | Free Cash Flow | ||||
| -2.16M | 3.60M | 9.55M | 27.55M | 347.00K | 24.74M | Operating Cash Flow |
| 16.40M | 6.17M | 12.48M | 28.44M | 915.00K | 25.20M | Investing Cash Flow |
| -2.33M | -2.57M | -2.54M | -4.98M | 6.29M | -419.00K | Financing Cash Flow |
| -10.70M | -4.83M | -3.85M | -23.13M | -7.55M | -25.63M |
Rcm Technologies Technical Analysis
Positive
22.88
Price Trends
19.33
Positive
18.86
Positive
20.16
Positive
Market Momentum
0.98
Positive
63.57
Neutral
65.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCMT, the sentiment is Positive. The current price of 22.88 is above the 20-day moving average (MA) of 22.85, above the 50-day MA of 19.33, and above the 200-day MA of 20.16, indicating a bullish trend. The MACD of 0.98 indicates Positive momentum. The RSI at 63.57 is Neutral, neither overbought nor oversold. The STOCH value of 65.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RCMT.
Rcm Technologies Risk Analysis
Rcm Technologies disclosed 5 risk factors in its most recent earnings report. Rcm Technologies reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Item Q4, 2024
Rcm Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Performance Comparison
RCMT
Rcm Technologies
22.88
3.41
17.51%
NNBR
NN
2.19
-0.81
-27.00%
TUSK
Mammoth Energy Services
2.93
-0.66
-18.38%
Rcm Technologies Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
RCM Technologies Approves Performance Stock Units Grant
Neutral
May 7, 2025
On May 6, 2025, RCM Technologies’ Compensation Committee approved grants of up to 2,904 performance stock units to Michael Saks, Division President of Health Care Services, under the company’s 2014 Omnibus Equity Compensation Plan. The vesting of these units is contingent upon the achievement of specific operating income levels during the performance period from December 29, 2024, to January 3, 2026, with provisions for accelerated vesting in the event of a Change in Control.
Executive/Board Changes
RCM Technologies Approves Performance Stock Units for Executives
Neutral
Apr 4, 2025
On April 1, 2025, RCM Technologies, Inc. announced that its Compensation Committee approved grants of performance stock units (PSUs) under the company’s 2014 Omnibus Equity Compensation Plan to key executives. The grants, which are tied to EBITDA performance from December 29, 2024, to January 3, 2026, include up to 62,500 PSUs for Executive Chairman and President Bradley S. Vizi, and up to 18,703 PSUs for Chief Financial Officer Kevin D. Miller, with accelerated vesting possible under certain conditions.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.