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Resources Connection
(NASDAQ:RGP)
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Rating:48Neutral
Price Target:
$4.50
▲(19.36% Upside)
Action:Reiterated
Date:07/25/26
RGP’s score is primarily held back by deteriorating financial performance—ongoing revenue declines, negative profitability, and sharply weaker cash generation. Technicals also remain bearish with the price below key moving averages. Offsetting factors include a comparatively strong, low-leverage balance sheet, cost-reduction progress and liquidity highlighted on the earnings call, and shareholder-return support via a high dividend yield and added credit flexibility.
Positive Factors
Balance sheet strength & liquidity
A strong liquidity position with $82.4M cash and no debt provides durable financial runway to fund operations, targeted investments, and shareholder actions while management executes a turnaround. This reduces bankruptcy risk and gives time to restore revenue and margins even if recovery is gradual.
Negative Factors
Multi-year revenue decline
Sustained top-line contraction over multiple years erodes scale, reduces pricing leverage, and limits the firm's ability to absorb fixed costs. Prolonged revenue shrinkage makes margin recovery harder and increases execution risk for turnaround plans dependent on demand normalization.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance sheet strength & liquidity
A strong liquidity position with $82.4M cash and no debt provides durable financial runway to fund operations, targeted investments, and shareholder actions while management executes a turnaround. This reduces bankruptcy risk and gives time to restore revenue and margins even if recovery is gradual.
Read all positive factors
Resources Connection Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how revenue is distributed across different business segments, highlighting which areas are driving growth and which may need strategic adjustments.
Shows how revenue is distributed across different business segments, highlighting which areas are driving growth and which may need strategic adjustments.
Data provided by:
The Fly
The FlyResources Connection (RGP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$147.07M
Dividend Yield6.41%
Average Volume (3M)733.43K
Price to Earnings (P/E)―
Beta (1Y)1.47
Revenue Growth-18.02%
EPS Growth79.32%
CountryUS
Employees3,055
SectorIndustrials
Sector Strength72
IndustryConsulting Services
Share Statistics
EPS (TTM)-1.20
Shares Outstanding34,443,626
10 Day Avg. Volume833,959
30 Day Avg. Volume733,433
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)0.89
Price to Sales (P/S)0.34
P/FCF Ratio244.99
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$6.00Price Target Upside59.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.03
Revenue Forecast (FY)$447.66M
Resources Connection Business Overview & Revenue Model
Company Description
Resources Connection, Inc. engages in the provision of consulting services to business customers under the Resources Global Professionals (RGP) name in North America, the Asia Pacific, and Europe. The company operates through On-Demand Talent, Con...
How the Company Makes Money
RGP primarily makes money by delivering professional services to clients on a time-and-materials and/or project basis. The core revenue stream is fees billed for its consultants’ and practitioners’ labor (typically priced by hourly or daily rates)...
Resources Connection Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 07, 2026
Earnings Call Sentiment Negative
The call reflected a company in the middle of a turnaround: management highlighted meaningful progress on cost reduction (12% run-rate SG&A improvement), a strong balance sheet with no debt and $82.4M cash, disciplined capital allocation, and positive customer survey results (95% intent to maintain or grow engagement). Offsetting these positives were significant year-over-year revenue declines (-18.3% consolidated) and margin and profitability pressure (gross margin down ~2.6 ppts, adjusted EBITDA negative $0.6M), driven by large declines in Consulting (-23%) and On-Demand Talent (-18%), lower utilization, and one-time/divestiture-related charges. Management expects FY'27 investments to be largely in place and to drive revenue in H2, with near-term guidance showing relatively flat revenue and modest gross margin stabilization. Overall, the negatives on revenue, margins, and near-term profitability outweigh the positives from liquidity, cost actions, and strategic investments.Positive Updates
Strong Balance Sheet and Liquidity
Ended quarter with $82.4M cash and cash equivalents, no outstanding debt, a new revolving credit facility providing greater covenant flexibility, $79.2M remaining available under share repurchase authorization, and ongoing quarterly dividend payments totaling $2.3M (approx. 6% annualized yield at quarter-end stock price).
Negative Updates
Material Revenue Decline
Consolidated revenue for Q4 was $106.1M, a decline of 18.3% on a same-day constant currency basis versus the prior year quarter, with notable weakness across major segments.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Balance Sheet and Liquidity
Ended quarter with $82.4M cash and cash equivalents, no outstanding debt, a new revolving credit facility providing greater covenant flexibility, $79.2M remaining available under share repurchase authorization, and ongoing quarterly dividend payments totaling $2.3M (approx. 6% annualized yield at quarter-end stock price).
Read all positive updates
Company Guidance
Management's Q1 FY27 guidance calls for revenue of $97–$102 million (noting Q4 FY26 was $106.1M and Q1 is expected to be roughly consistent with Q4 after seasonal impacts and the Sitrick divestiture), gross margin of 37–38% (Q4 was 37.6%), run‑rate SG&A of $41–$43 million (Q4 run‑rate SG&A was $40.5M, a 12% improvement year‑over‑year), and non‑run‑rate/non‑cash expense of $2–$3 million (Q4 non‑run‑rate SG&A totaled $14.1M, including $6.4M non‑cash). For context, Q4 adjusted EBITDA was negative $0.6M, enterprise average bill rate was $120 (down from $125 a year ago) with segment bill rates of $145 (On‑Demand), $163 (Consulting) and $57 (Europe/AP), cash was $82.4M with no debt, quarterly dividends totaled $2.3M (~6% annualized yield), and $79.2M remained available under the share repurchase program; management also reiterated a target of 6–8% normalized company margin when revenue exceeds $500M.Resources Connection Financial Statement Overview
Summary
Income Statement
26
Negative
Balance Sheet
68
Positive
Cash Flow
34
Negative
| Breakdown | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 452.01M | 551.33M | 632.80M | 775.64M | 805.02M |
| Gross Profit | 169.68M | 207.42M | 246.07M | 313.14M | 316.64M |
| EBITDA | -33.11M | 10.50M | 41.30M | 84.70M | 92.52M |
| Net Income | -40.60M | -191.78M | 21.03M | 54.36M | 67.17M |
Balance Sheet | |||||
| Total Assets | 257.40M | 304.69M | 510.91M | 532.00M | 581.47M |
| Cash, Cash Equivalents and Short-Term Investments | 82.37M | 86.15M | 108.89M | 116.78M | 104.22M |
| Total Debt | 22.52M | 25.30M | 13.32M | 17.73M | 75.55M |
| Total Liabilities | 87.63M | 97.61M | 92.15M | 117.48M | 209.02M |
| Stockholders Equity | 169.77M | 207.08M | 418.76M | 414.52M | 372.45M |
Cash Flow | |||||
| Free Cash Flow | 619.00K | 16.19M | 20.78M | 79.62M | 46.48M |
| Operating Cash Flow | 1.43M | 18.90M | 21.92M | 81.64M | 49.44M |
| Investing Cash Flow | 1.08M | -13.57M | -8.55M | 3.94M | -2.96M |
| Financing Cash Flow | -7.53M | -27.73M | -20.71M | -71.91M | -13.37M |
Resources Connection Technical Analysis
Positive
3.77
Price Trends
4.41
Negative
4.13
Positive
4.25
Positive
Market Momentum
-0.06
Positive
33.75
Neutral
22.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGP, the sentiment is Positive. The current price of 3.77 is below the 20-day moving average (MA) of 4.41, below the 50-day MA of 4.41, and below the 200-day MA of 4.25, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 33.75 is Neutral, neither overbought nor oversold. The STOCH value of 22.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RGP.
Resources Connection Risk Analysis
Resources Connection disclosed 30 risk factors in its most recent earnings report. Resources Connection reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Resources Connection Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $2.61B | 22.25 | 25.53% | ― | 13.60% | 14.77% | |
72 Outperform | $4.95B | 19.46 | 15.14% | ― | 7.12% | 15.93% | |
67 Neutral | $1.46B | 17.40 | 8.35% | 0.70% | -9.45% | -20.88% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
57 Neutral | $243.04M | 119.17 | 4.33% | ― | -6.14% | -78.29% | |
53 Neutral | $189.07M | -5.13 | -39.22% | ― | -7.54% | 52.04% | |
48 Neutral | $147.07M | -3.63 | -21.44% | 7.43% | -18.02% | 79.32% |
* Industrials Sector Average
RGP
Resources Connection
4.37
-0.12
-2.61%
FORR
Forrester Research
11.50
0.56
5.12%
FC
Franklin Covey Company
21.45
2.83
15.20%
FCN
FTI Consulting
159.38
-6.14
-3.71%
HURN
Huron Consulting
151.77
29.79
24.42%
ICFI
Icf International
80.92
-6.89
-7.84%
Resources Connection Corporate Events
Business Operations and StrategyExecutive/Board ChangesPrivate Placements and Financing
Resources Connection Secures New Revolving Credit Facility
Positive
Jul 17, 2026
On July 15, 2026, Resources Connection entered into a new secured revolving credit facility with PNC Bank and other lenders, providing up to $30 million in borrowing capacity, with an uncommitted option to increase by an additional $20 million bef...
Business Operations and StrategyExecutive/Board Changes
Resources Connection Announces Board Leadership Transition and Refresh
Neutral
May 5, 2026
On May 5, 2026, Resources Connection, Inc. announced that Board Chair A. Robert Pisano and director Robert Kistinger will retire from the Board effective immediately prior to the 2026 Annual Meeting of Stockholders, with Pisano stepping down one y...
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.