Resources Connection (RGP) AI Stock Analysis

• Market Cap: $173.30M
• Dividend Yield: 6.74%
• Average Volume (3M): 439.87K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.28
• Revenue Growth: -10.83%
• EPS Growth: -1669.11%
• Country: US
• Employees: 722
• Sector: Industrials
• Sector Strength: 72
• Industry: Consulting Services
• EPS (TTM): -0.07
• Shares Outstanding: 33,390,495
• 10 Day Avg. Volume: 733,741
• 30 Day Avg. Volume: 439,873
• PEG Ratio: <0.01
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 0.31
• P/FCF Ratio: 10.66
• Enterprise Value/Market Cap: 0.67
• Enterprise Value/Revenue: 0.22
• Enterprise Value/Gross Profit: 0.57
• Enterprise Value/Ebitda: 10.49
• 1Y Price Target: $10.00
• Price Target Upside: 92.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: $5.00 ▼(-3.66% Downside)

The overall stock score of 51 reflects significant financial and technical challenges faced by Resources Connection. The company's declining revenue and profitability, coupled with bearish technical indicators, weigh heavily on the score. However, the high dividend yield provides some support, appealing to income-focused investors. The earnings call provided some optimism, but ongoing demand challenges and segment declines remain concerns.

Positive Factors

Revenue and Gross Margin Exceed Expectations

Exceeding revenue and margin expectations suggests effective cost management and strong market demand, enhancing financial stability.

Improvements in Bill Rates

Higher bill rates indicate successful pricing strategies, potentially leading to improved profitability and competitive positioning.

Outsourced Services Growth

Growth in outsourced services reflects strong demand and operational efficiency, supporting long-term revenue and margin expansion.

Negative Factors

Decline in On-Demand and Consulting Segments

Significant declines in key segments highlight challenges in adapting to market changes, potentially affecting future revenue streams.

Continued Choppy Demand Environment

Persistent demand volatility can disrupt revenue predictability and strategic planning, impacting long-term growth prospects.

Revenue Decline Expectations for Q2

Anticipated revenue decline reflects ongoing market challenges, potentially straining financial performance and investor confidence.

Resources Connection Business Overview & Revenue Model

Company Description

Resources Connection, Inc. provides consulting services to business customers under the Resources Global Professionals name in North America, Europe, and the Asia Pacific. The company offers services in the areas of transactions, including integration and divestitures, bankruptcy/restructuring, going public readiness and support, financial process optimization, and system implementation; and regulations, such as accounting regulations, internal audit and compliance, data privacy and security, healthcare compliance, and regulatory compliance. It also provides transformations services comprising finance transformation, digital transformation, supply chain management, cloud migration, and data design and analytics. The company has a strategic alliance with Kotter International, Inc. to accelerate joint business development initiatives. The company was formerly known as RC Transaction Corp. and changed its name to Resources Connection, Inc. in August 2000. Resources Connection, Inc. was founded in 1996 and is headquartered in Irvine, California.

How the Company Makes Money

RGP generates revenue primarily through the provision of consulting services, where the company charges clients on an hourly or project basis. Key revenue streams include fees from interim management roles, project consulting engagements, and advisory services. The company also benefits from long-term relationships with clients, leading to repeat business and referrals. Additionally, RGP has strategic partnerships with various firms and organizations, which can enhance its service offerings and expand its market reach. The emphasis on flexible workforce solutions allows RGP to adapt to changing client needs, contributing to consistent revenue generation.

Resources Connection Financial Statement Overview

Summary

Resources Connection is facing significant financial challenges, particularly in terms of declining revenue and profitability. The balance sheet remains relatively stable with manageable debt levels, but the negative return on equity is concerning. Cash flow generation is under pressure, although some cash management strengths are evident. Overall, the company needs to address operational inefficiencies to improve its financial health.

Income Statement

The income statement shows declining revenue and profitability. The TTM data indicates a negative revenue growth rate of -3.03% and a significant drop in net profit margin to -35.25%. The company is experiencing operational challenges, as evidenced by negative EBIT and EBITDA margins. Historical data shows a consistent decline in revenue, impacting overall profitability.

Balance Sheet

The balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.12 in the TTM period, indicating manageable debt levels. However, the return on equity is negative at -74.14%, highlighting inefficiencies in generating returns for shareholders. The equity ratio remains stable, suggesting a solid capital structure despite profitability issues.

Cash Flow

Cash flow analysis reveals a decrease in free cash flow growth by -45.58% in the TTM period, indicating cash generation challenges. The operating cash flow to net income ratio is low at 0.19, suggesting limited cash conversion efficiency. Despite these challenges, the free cash flow to net income ratio remains relatively strong at 0.77, indicating some resilience in cash management.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	534.63M	551.33M	632.80M	775.64M	805.02M	629.52M
Gross Profit	203.37M	207.42M	246.07M	313.14M	316.64M	241.40M
EBITDA	11.13M	10.50M	41.30M	84.70M	91.92M	33.41M
Net Income	-188.48M	-191.78M	21.03M	54.36M	67.17M	25.23M
Balance Sheet
Total Assets	287.21M	304.69M	510.91M	532.00M	581.47M	520.64M
Cash, Cash Equivalents and Short-Term Investments	77.52M	86.15M	108.89M	116.78M	104.22M	74.39M
Total Debt	25.35M	25.30M	13.32M	17.73M	75.55M	73.95M
Total Liabilities	80.85M	97.61M	92.15M	117.48M	209.02M	191.10M
Stockholders Equity	206.36M	207.08M	418.76M	414.52M	372.45M	329.55M
Cash Flow
Free Cash Flow	8.49M	16.19M	20.78M	79.62M	46.48M	36.10M
Operating Cash Flow	11.06M	18.90M	21.92M	81.64M	49.44M	39.94M
Investing Cash Flow	-2.77M	-13.57M	-8.55M	3.94M	-2.96M	-3.84M
Financing Cash Flow	-21.28M	-27.73M	-20.71M	-71.91M	-13.37M	-59.46M

Resources Connection Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 5.19 is above the 20-day moving average (MA) of 5.03, above the 50-day MA of 4.69, and above the 200-day MA of 5.09, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 61.15 is Neutral, neither overbought nor oversold. The STOCH value of 65.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RGP.

Resources Connection Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FCN	76 Outperform	$5.44B	22.42	13.30%	―	-0.95%	-10.54%
HURN	75 Outperform	$3.07B	29.87	21.20%	―	12.50%	29.40%
ICFI	74 Outperform	$1.58B	16.12	9.88%	0.65%	-3.81%	-7.05%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FC	59 Neutral	$201.79M	70.21	4.09%	―	-7.02%	-86.27%
RGP	51 Neutral	$173.30M	-0.91	-61.44%	6.74%	-10.83%	-1669.11%
FORR	42 Neutral	$134.73M	-1.57	-43.39%	―	-8.73%	-1168.15%

Resources Connection Corporate Events

Resources Connection Announces New CEO Appointment

On October 30, 2025, Resources Connection, Inc. announced that its Board of Directors decided not to renew the employment agreement with Kate W. Duchene, the company’s President and CEO, effective November 2, 2025. Roger Carlile, a director of the company and founder of Ankura Consulting Group, will take over as President and CEO starting November 3, 2025. This leadership transition is accompanied by a detailed employment agreement for Mr. Carlile, which includes compensation and equity awards, reflecting the company’s strategic direction and commitment to leadership continuity. Ms. Duchene will remain as an Executive Advisor until January 3, 2026, and continue as a consultant through December 31, 2028, ensuring a smooth transition. This change is poised to impact the company’s operations and market positioning, with potential implications for stakeholders as Mr. Carlile brings extensive experience from his previous roles in global business advisory firms.

Resources Connection Holds Annual Stockholders Meeting

On October 16, 2025, Resources Connection, Inc. held its annual stockholders meeting where three directors were elected and Ernst & Young LLP was ratified as the independent public accounting firm for 2026. The stockholders also approved the executive officer compensation. Additionally, the Board declared a quarterly dividend of $0.07 per share, payable on December 12, 2025, to stockholders of record as of November 14, 2025.