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Resources Connection (RGP)
NASDAQ:RGP
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Resources Connection
(NASDAQ:RGP)
Rating:50Neutral
Price Target:
$5.50
▲(18.79% Upside)
Resources Connection (RGP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$157.36M
Dividend Yield10.58%
Average Volume (3M)292.61K
Price to Earnings (P/E)―
Beta (1Y)1.25
Revenue Growth-12.87%
EPS Growth-1025.47%
CountryUS
Employees722
SectorIndustrials
Sector Strength78
IndustryConsulting Services
Share Statistics
EPS (TTM)-2.23
Shares Outstanding33,339,880
10 Day Avg. Volume305,171
30 Day Avg. Volume292,607
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.70
Enterprise Value/Revenue0.20
Enterprise Value/Gross Profit0.53
Enterprise Value/Ebitda-1.53
Forecast
1Y Price Target
$10.25Price Target Upside121.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Resources Connection Business Overview & Revenue Model
Company DescriptionResources 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 MoneyRGP makes money through a revenue model primarily based on providing consulting services to its clients. The company generates revenue by charging hourly rates for the professional services delivered by its consultants. These services include project management, business process improvement, regulatory compliance, and strategic advisory in finance, IT, and human resources. RGP's key revenue streams are derived from its client engagements across various industries, including healthcare, financial services, manufacturing, and technology. The firm also benefits from strategic partnerships and alliances that enhance its service offerings and expand its market reach. Additionally, RGP's business model focuses on maintaining a flexible workforce of experienced professionals, allowing the company to scale its operations in response to client demand and market conditions.
Resources Connection Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q4-2025)
| % Change Since: -12.14%|
Next Earnings Date:Oct 01, 2025
Earnings Call Sentiment Neutral
RGP demonstrated strong revenue and margin performance in Q4, driven by growth in Europe and Asia and the Outsourced Services segment. However, significant declines in the Consulting and On-Demand segments, a noncash impairment charge, and a weaker Q1 2026 outlook highlight ongoing challenges.Q4-2025 Updates
Positive Updates
Strong Q4 Revenue and Margin Performance
RGP achieved revenue of $139.3 million and a gross margin of 40.2%, both above the high end of their outlook range. This was driven by improved pricing and cost efficiency.
Growth in Europe and Asia
Europe and Asia grew in Q4 to the highest revenue level of the fiscal year. Europe saw quarter-over-quarter constant currency growth of 8%, with a 7% increase in bill rates.
Outsourced Services Segment Growth
The Outsourced Services segment saw a 4% year-over-year growth and a 3.5% sequential growth over Q3, driven by new engagements with AI start-ups and scale-ups.
Improved Average Bill Rates
Enterprise-wide average bill rate increased to $125 from $120 a year ago, with a 13% increase in the Consulting segment and a 7% increase in Europe and Asia Pac.
New Board Member Appointments
RGP welcomed two new Board members, Jeff Fox and Filip Gydé, who bring critical investor insight and expertise in IT services, aligning with RGP's strategic priorities.
Negative Updates
Consulting Segment Revenue Decline
Consulting segment revenue was $51 million, a decline of 14% from the prior year, despite an increase in average bill rates.
On-Demand Segment Revenue Decline
On-Demand segment revenue was $53 million, a decline of 16% compared to the prior year, due to macroeconomic uncertainties.
Noncash Goodwill Impairment Charge
RGP recorded a noncash goodwill impairment charge of $69 million in the Consulting segment due to business performance and market capitalization reduction.
Q1 2026 Revenue Outlook Decline
RGP's Q1 2026 revenue outlook suggests a 14% decline from Q1 of the previous year on a same-day basis, impacted by project delays and macroeconomic uncertainties.
Company Guidance
During the Resources Connection, Inc. conference call for Q4 of fiscal year 2025, guidance was provided highlighting the company's strategic focus and anticipated growth, despite macroeconomic uncertainties. The company reported revenue of $139.3 million and a gross margin of 40.2%, exceeding their outlook. The average bill rate improved by 4% year-over-year, with Europe and Asia showing significant growth, particularly in the U.K., where constant currency growth was 8%. The Consulting segment faced a 14% year-over-year decline, while On-Demand revenue fell by 16%. Europe and Asia Pacific segments grew by 5% sequentially, and Outsourced Services saw a 4% year-over-year increase. The company's strategy emphasizes leveraging AI for operational efficiency, cross-selling across segments, and expanding strategic accounts. Looking forward, RGP anticipates revenue between $115 million and $120 million for Q1 of fiscal year 2026, with a gross margin expected to range from 36% to 37%, despite typical summer impacts and project start delays.Resources Connection Financial Statement Overview
Summary
Resources Connection is facing challenges in revenue and profitability, as evidenced by declining income statement metrics. The balance sheet remains strong with low leverage but reduced equity. Cash flow generation has weakened, particularly in free cash flow, which may impact future operational flexibility. The company needs to address these operational challenges to improve financial health.Income Statement
The company has experienced a significant decline in revenue and profitability, with TTM revenue falling from $632.8 million to $560.2 million and net income turning negative. Gross profit margin decreased to 37.3% in the TTM period from 38.9% in 2023. The net profit margin showed a stark decline to -19.3% in TTM from 3.3% annually in 2023. EBIT and EBITDA margins have also turned negative, indicating operational challenges.35
Negative
Balance Sheet
The company maintains a healthy equity position with an equity ratio of 73.9% in TTM. The debt-to-equity ratio remains low at 0.10, indicating low leverage. However, there is a decline in stockholders' equity from $418.8 million in 2023 to $277.8 million in TTM, which could be a concern if the trend continues.70
Positive
Cash Flow
Free cash flow has significantly decreased in the TTM period to $2.8 million from $20.8 million in 2023, impacting the free cash flow to net income ratio. Operating cash flow remains positive but has decreased, reflecting challenges in cash generation compared to prior periods.45
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 632.80M | 775.64M | 805.02M | 629.52M | 703.35M |
| Gross Profit | 246.07M | 313.14M | 316.64M | 241.40M | 275.48M |
| EBITDA | 38.26M | 83.94M | 92.52M | 33.41M | 53.79M |
| Net Income | 21.03M | 54.36M | 67.17M | 25.23M | 28.29M |
Balance Sheet | |||||
| Total Assets | 510.91M | 532.00M | 581.47M | 520.64M | 529.18M |
| Cash, Cash Equivalents and Short-Term Investments | 108.89M | 116.78M | 104.22M | 74.39M | 95.62M |
| Total Debt | 13.32M | 17.73M | 75.55M | 73.95M | 129.90M |
| Total Liabilities | 92.15M | 117.48M | 209.02M | 191.10M | 225.52M |
| Stockholders Equity | 418.76M | 414.52M | 372.45M | 329.55M | 303.66M |
Cash Flow | |||||
| Free Cash Flow | 20.78M | 79.62M | 46.48M | 36.10M | 47.18M |
| Operating Cash Flow | 21.92M | 81.64M | 49.44M | 39.94M | 49.52M |
| Investing Cash Flow | -8.55M | 3.94M | -2.96M | -3.84M | -26.77M |
| Financing Cash Flow | -20.71M | -71.91M | -13.37M | -59.46M | 30.90M |
Resources Connection Technical Analysis
Negative
4.63
Price Trends
5.25
Negative
5.37
Negative
6.63
Negative
Market Momentum
-0.20
Positive
41.08
Neutral
60.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGP, the sentiment is Negative. The current price of 4.63 is below the 20-day moving average (MA) of 4.94, below the 50-day MA of 5.25, and below the 200-day MA of 6.63, indicating a bearish trend. The MACD of -0.20 indicates Positive momentum. The RSI at 41.08 is Neutral, neither overbought nor oversold. The STOCH value of 60.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RGP.
Resources Connection Risk Analysis
Resources Connection disclosed 28 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
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.22B | 22.44 | 29.05% | 1.03% | 9.28% | 44.19% | |
74 Outperform | $1.82B | 17.12 | 11.09% | 0.57% | -0.47% | 10.03% | |
66 Neutral | $247.91M | 24.47 | 15.47% | ― | -0.40% | -40.98% | |
66 Neutral | €10.82B | 25.33 | 6.80% | 2.53% | 4.18% | -16.31% | |
50 Neutral | $157.36M | ― | -61.29% | 10.58% | -12.87% | -1025.47% | |
48 Neutral | $185.87M | ― | -44.74% | ― | -9.11% | -6082.17% | |
47 Neutral | $51.87M | 0.71 | 112.00% | ― | -3.19% | -150.54% |
* Industrials Sector Average
Performance Comparison
RGP
Resources Connection
4.63
-5.03
-52.07%
CRAI
Cra International
183.75
25.11
15.83%
FORR
Forrester Research
9.58
-9.17
-48.91%
FC
Franklin Covey Company
19.35
-19.96
-50.78%
ICFI
Icf International
98.40
-61.33
-38.40%
AERT
Aeries Technology
1.00
-1.35
-57.45%
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.