Rgc Resources (RGCO) AI Stock Analysis

• Market Cap: $221.61M
• Dividend Yield: 3.75%
• Average Volume (3M): 10.72K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.57
• Revenue Growth: 12.63%
• EPS Growth: 10.99%
• Country: US
• Employees: 104
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 0.47
• Shares Outstanding: 10,394,487
• 10 Day Avg. Volume: 15,306
• 30 Day Avg. Volume: 10,721
• PEG Ratio: 1.55
• Price to Book (P/B): 2.04
• Price to Sales (P/S): 2.43
• P/FCF Ratio: 28.14
• Enterprise Value/Market Cap: 1.72
• Enterprise Value/Revenue: 3.87
• Enterprise Value/Gross Profit: 13.17
• Enterprise Value/Ebitda: 10.99
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 1.31
• Revenue Forecast (FY): $97.00M

• Rating: 62 Neutral
• Price Target: $22.50 ▲(4.60% Upside)
• Action: Reiterated Date: 03/20/26
• Date: Action: Reiterated 03/20/26

The score is driven primarily by mid-range financial quality (solid margins but constrained by leverage and thin FCF) and weak technicals (below major moving averages with bearish momentum). These are partially offset by favorable valuation (low P/E and ~4% dividend) and corporate actions that support liquidity, despite near-term cost pressure reflected in lower Q1 earnings.

Positive Factors

Regulated local distribution model

As a local regulated gas distributor, the company earns tariffed delivery revenues and cost pass-throughs under state oversight. This business model provides stable, predictable cash flows and recoverable investment opportunities via rate base mechanisms that support durable earnings over multi-year regulatory cycles.

Active rate-making to recover costs

Pursuing a formal rate case to recover higher operating and capital costs is a structural lever for utilities. If approved, the requested $4.3M would increase authorized revenues and rate base recovery, improving long-term margin sustainability and cash generation versus relying solely on throughput-driven revenue.

Improved liquidity runway

Extending and restating the revolving credit facility sustains access to committed liquidity for operations and capital spending. For a capital‑intensive regulated utility, multi-year committed funding reduces refinancing risk and enables steady investment in infrastructure that supports reliable service and future rate-base growth.

Negative Factors

Elevated leverage

Sustained leverage around 1.2x equity constrains financial flexibility for a small regional utility. High debt increases interest and covenant sensitivity, limits headroom for incremental investments or acquisitions, and raises the stakes on timely regulatory recoveries to preserve credit metrics over the medium term.

Thin and uneven free cash flow

Free cash flow conversion is weak and lumpy due to ongoing capital expenditures and episodic negative FCF years. Thin FCF reduces capacity to self-fund growth, dividends, or debt paydown, heightening reliance on external funding and regulatory timing to sustain investment and shareholder returns.

Rising cost pressures and regulatory refund risk

Persistent operating cost increases erode margins in a delivery-focused utility where recovery depends on regulators. Interim rates that are refundable amplify regulatory risk: if the rate case outcome is unfavorable, the company could face refunds or delayed recovery, pressuring earnings and cash over the next regulatory cycle.

Rgc Resources Business Overview & Revenue Model

Company Description

RGC Resources, Inc., through its subsidiaries, operates as an energy services company. It sells and distributes natural gas to residential, commercial, and industrial customers in Roanoke, Virginia, and the surrounding localities. The company also provides various unregulated services. It operates approximately 1,157 miles of transmission and distribution pipeline; and a liquefied natural gas storage facility, as well as owns and operates 6 metering stations. RGC Resources, Inc. was founded in 1883 and is based in Roanoke, Virginia.

How the Company Makes Money

RGC Resources makes money primarily through its regulated natural gas distribution business. Revenue is generated by delivering natural gas to end-use customers and billing them based on tariffed rate schedules approved by its state regulator, which generally include (1) a customer charge and (2) volumetric or demand-related delivery charges. In addition, customer bills typically include a cost-of-gas component that reflects the cost of purchasing natural gas from upstream suppliers; this component is generally passed through to customers with limited margin impact to the utility, while the company’s earnings are principally driven by regulated distribution rates designed to recover operating costs and provide an allowed return on invested capital. Earnings are therefore influenced by the size and composition of the customer base, throughput (weather and usage patterns), and the level of invested capital in distribution infrastructure (which can be included in the regulated rate base through rate cases and other regulatory mechanisms). Significant factors contributing to profitability include timely recovery of prudently incurred costs (including operations, maintenance, and certain infrastructure investments), regulatory outcomes (rate approvals and authorized return), and the company’s ability to manage operating expenses and system integrity/reliability spending within the regulatory framework. Specific material partnerships, unregulated business lines, or non-utility revenue streams: null.

Rgc Resources Financial Statement Overview

Summary

Mid-range fundamentals: solid profitability (TTM net margin ~13%) and improved earnings consistency, but leverage remains elevated (debt ~1.2x equity) and free-cash-flow conversion is thin with a history of uneven FCF.

Income Statement

Profitability is solid in the most recent periods, with TTM (Trailing-Twelve-Months) net margin around 13% and strong operating profitability, while revenue growth has stabilized to low-single-digits in TTM after a sharper swing in prior years. The key weakness is earnings volatility in the cycle—most notably the large loss in 2022—showing results can be impacted by non-recurring or cost-related shocks even in a regulated business.

Balance Sheet

The balance sheet is workable but leveraged: debt runs at roughly 1.2x equity in TTM (Trailing-Twelve-Months) and has remained above 1x for several years, limiting flexibility. Offsetting that, equity has been sustained and returns on equity have been consistently around the low-double-digits recently, indicating the capital structure is supporting acceptable shareholder returns despite the debt load.

Cash Flow

Cash generation is positive overall with TTM (Trailing-Twelve-Months) operating cash flow meaningfully positive and free cash flow turning positive again, helped by improving free-cash-flow growth. However, free cash flow remains relatively thin versus reported earnings (well below 1:1) and prior years included negative free cash flow, pointing to ongoing capital spending and periodic cash flow pressure.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	98.31M	95.33M	84.64M	97.44M	84.17M	75.17M
Gross Profit	28.90M	21.38M	30.29M	29.77M	26.15M	25.49M
EBITDA	34.64M	35.39M	32.48M	30.40M	-29.46M	26.58M
Net Income	12.89M	13.28M	11.76M	11.30M	-31.73M	10.10M
Balance Sheet
Total Assets	341.04M	329.84M	320.70M	303.73M	290.31M	310.11M
Cash, Cash Equivalents and Short-Term Investments	2.66M	2.32M	894.18K	1.51M	4.90M	1.52M
Total Debt	156.19M	148.96M	148.64M	141.17M	137.00M	140.47M
Total Liabilities	224.61M	216.29M	212.56M	203.00M	197.22M	210.41M
Stockholders Equity	116.43M	113.55M	108.14M	100.73M	93.09M	99.70M
Cash Flow
Free Cash Flow	8.58M	8.22M	-4.66M	-1.51M	-9.91M	-8.40M
Operating Cash Flow	29.20M	28.95M	17.43M	23.80M	15.55M	11.57M
Investing Cash Flow	-21.17M	-20.73M	-22.03M	-27.40M	-30.62M	-25.85M
Financing Cash Flow	-7.48M	-6.79M	3.98M	218.94K	18.44M	15.51M

Rgc Resources Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 21.51
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGCO, the sentiment is Negative. The current price of 21.51 is below the 20-day moving average (MA) of 21.92, below the 50-day MA of 21.65, and above the 200-day MA of 21.44, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 43.54 is Neutral, neither overbought nor oversold. The STOCH value of 5.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RGCO.

Rgc Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SR	67 Neutral	$5.23B	12.84	8.27%	3.82%	-4.50%	2.49%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
NWN	65 Neutral	$2.14B	16.85	7.78%	4.18%	11.27%	20.04%
SPH	65 Neutral	$1.33B	6.81	20.91%	6.97%	7.94%	43.23%
RGCO	62 Neutral	$221.61M	11.15	11.11%	3.75%	12.63%	10.99%
OPAL	58 Neutral	$357.19M	4.50	-40.95%	―	7.03%	-86.15%
NFE	43 Neutral	$221.95M	-0.52	-87.35%	―	-27.23%	-634.60%

Rgc Resources Corporate Events

RGC Resources Extends Revolving Credit Facility with Pinnacle Bank

On March 17, 2026, Roanoke Gas Company amended and restated its revolving promissory note and entered into a third amendment to its loan agreement with Pinnacle Bank, extending the maturity date of the revolving facility to March 31, 2028. The amendment also reset tiered borrowing limits to $30 million from March 17, 2026 through March 31, 2027, $20 million from April 1, 2027 through September 30, 2027, and back to $30 million from October 1, 2027 through March 31, 2028, while leaving all other terms, including RGC Resources’ guaranty and existing covenants, unchanged, effectively preserving access to flexible funding for ongoing utility operations.

The most recent analyst rating on (RGCO) stock is a Buy with a $25.00 price target. To see the full list of analyst forecasts on Rgc Resources stock, see the RGCO Stock Forecast page.

RGC Resources Schedules Q1 2025 Results Conference Call

RGC Resources, Inc. plans to host a conference call with analysts to review its operating results for the first quarter ended December 31, 2025, providing the investment community with direct commentary from management on recent financial performance. The material used on the call is being furnished rather than filed under securities regulations, limiting its exposure to certain liabilities and clarifying that it will not automatically be incorporated into the company’s other securities law filings.

By choosing to furnish, not file, the call materials, the company signals a controlled approach to disclosure that still offers transparency to analysts while managing legal risk under the Securities Exchange Act of 1934. This structure is standard for many public companies and indicates that while stakeholders gain insight into quarterly operations, the information carries a different regulatory status than formally filed reports, which may influence how investors weigh the call’s content.

The most recent analyst rating on (RGCO) stock is a Buy with a $24.50 price target. To see the full list of analyst forecasts on Rgc Resources stock, see the RGCO Stock Forecast page.

RGC Resources Reports Lower Q1 Earnings Amid Cost Pressures

On February 5, 2026, RGC Resources, Inc. reported first-quarter 2026 consolidated earnings of $4.9 million, or $0.47 per share, for the period ended December 31, 2025, down from $5.3 million, or $0.51 per share, a year earlier, as flat margins and higher personnel, IT, property tax and depreciation expenses weighed on results despite lower interest costs. To address rising cost pressures, the company filed a rate case in early December seeking $4.3 million in additional annualized revenue, with interim rates taking effect on January 1, 2026 subject to regulatory review and potential refund, while Roanoke Gas continues to invest in system reliability and benefit from steady customer growth, including new housing connections and an unusually high number of reconnections during the quarter.

The most recent analyst rating on (RGCO) stock is a Hold with a $23.00 price target. To see the full list of analyst forecasts on Rgc Resources stock, see the RGCO Stock Forecast page.

RGC Resources refreshes board and appoints new leadership

At its annual shareholders meeting held on January 26, 2026, RGC Resources, Inc. shareholders elected Jacqueline L. Archer, Frank Russell Ellett and Robert B. Johnston as Class B directors for three-year terms ending in 2029, ratified Deloitte & Touche LLP as independent auditors for the fiscal year ending September 30, 2026, approved the issuance of an additional 50,000 common shares under the company’s stock bonus plan, and backed the firm’s executive compensation package in a non-binding advisory vote, while the board recognized the service of retiring directors Nancy Howell Agee and J. Allen Layman. Following the meeting, the board named John B. Williamson III as chairman and appointed Paul W. Nester as president and CEO of both RGC Resources and Roanoke Gas Company, alongside a refreshed senior management slate across the parent and its primary utility subsidiary, signaling continuity in governance with a strengthened leadership structure that may influence strategic direction, capital allocation and regulatory engagement for the company’s Virginia-focused gas operations.

The most recent analyst rating on (RGCO) stock is a Hold with a $23.00 price target. To see the full list of analyst forecasts on Rgc Resources stock, see the RGCO Stock Forecast page.