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Research Solutions (RSSS)
:RSSS
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Research Solutions
(NASDAQ:RSSS)
Rating:59Neutral
Price Target:―
Positive Factors
Financial Stability
With $7.7M in cash, no debt, and projections for positive free cash flow, there is sufficient capital to support organic growth.
Operational Efficiency
Gross margins were the highest in company history, expanding for the seventh consecutive quarter.
Revenue Growth
The high-margin Platform segment continues to be the key to long-term value creation with revenue up 47% year-over-year, representing 39% of total revenue and almost 2/3 of gross profits.
Negative Factors
Budget Cuts
Government and academic budget cuts could potentially impact business.
Market Valuation
Shares trade at 2.4x FY25 revenue versus its direct peer group average RELX and CLVT at 5.6x, indicating a potential undervaluation.
Research Solutions (RSSS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$92.83M
Dividend YieldN/A
Average Volume (3M)40.11K
Price to Earnings (P/E)―
Beta (1Y)0.04
Revenue Growth18.51%
EPS Growth-714.65%
CountryUS
Employees145
SectorTechnology
Sector Strength84
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.03
Shares Outstanding32,458,730
10 Day Avg. Volume42,389
30 Day Avg. Volume40,112
Financial Highlights & Ratios
PEG Ratio-0.71
Price to Book (P/B)7.48
Price to Sales (P/S)0.00
P/FCF Ratio16.42
Enterprise Value/Market Cap0.66
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda0.12
Forecast
1Y Price Target
$5.12Price Target Upside73.56% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Research Solutions Business Overview & Revenue Model
Company DescriptionResearch Solutions, Inc., through its subsidiaries, provides cloud-based software-as-a-service research platform. The company is also involved in the transactional sale of published scientific, technical, and medical (STM) content managed, sourced, and delivered through the Transactions platform. Its solutions enable life science and other research intensive organizations to accelerate their research and development activities with access and management STM articles used throughout the intellectual property development lifecycle. The company was formerly known as Derycz Scientific, Inc. and changed its name to Research Solutions, Inc. in March 2013. Research Solutions, Inc. was founded in 2006 and is based in Henderson, Nevada.
How the Company Makes MoneyResearch Solutions makes money through a subscription-based revenue model and transactional services. Key revenue streams include subscription fees from its cloud-based platform, Article Galaxy, which offers on-demand document retrieval and management services. The company also generates revenue from per-transaction fees when users access or purchase specific articles or documents. Significant partnerships with academic institutions, corporate research divisions, and publishers help broaden its customer base and ensure a continuous flow of content, contributing to its earnings.
Research Solutions Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q3-2025)
| % Change Since: 4.98%|
Next Earnings Date:Sep 18, 2025
Earnings Call Sentiment Positive
The earnings call for Research Solutions, Inc. presented a generally positive outlook with significant achievements in ARR growth, platform subscription revenue, and adjusted EBITDA. The company's AI strategy is showing strong results, contributing to the overall positive performance. However, challenges such as a decline in transaction revenue and active customer count were noted.Q3-2025 Updates
Positive Updates
Annual Recurring Revenue (ARR) Milestone
ARR surpassed $20 million for the first time, with $1.2 million incremental ARR for the quarter, marking a 23% year-over-year growth.
Platform Subscription Revenue Growth
Platform subscription revenue increased by 22% to $4.8 million, driven by growth in SITE B2B and B2C platform revenue and Article Galaxy product.
Gross Margin Improvement
Gross margin improved by 430 basis points to 49.5%, with platforms recording a gross margin of 87.4%.
Adjusted EBITDA Record
Adjusted EBITDA set a new company record at $1.4 million, a significant increase from $961,000 in the prior year quarter.
Cash Flow and Liquidity
Cash and cash equivalents increased to $9.9 million from $6.1 million as of 06/30/2024, with a trailing twelve-month cash flow from operations of over $6.7 million.
AI Strategy Success
AI-based products showed strong growth, with SITE experiencing a 180% year-over-year increase in the B2B enterprise license segment.
Negative Updates
Transaction Revenue Decline
Transaction revenue decreased by 4% to $7.8 million compared to the prior year quarter, attributed to lower paid order volume.
Active Customer Count Decline
Total active customer count decreased to 1,380 from 1,426 in the same period a year ago.
Company Guidance
In the fiscal third quarter of 2025, Research Solutions, Inc. reported strong financial and operational results, marked by several key metrics. The company achieved an annual recurring revenue (ARR) of $20.4 million, reflecting a 23% year-over-year increase, with $1.2 million in net incremental ARR growth for the quarter. Platform subscription revenue rose by 22% to $4.8 million, driven by growth in both SITE B2B and B2C platform revenue. Gross margin improved by 430 basis points to 49.5%, showcasing a revenue mix shift towards higher-margin SaaS offerings. Total revenue reached $12.7 million, up from $12.1 million the previous year. Additionally, adjusted EBITDA set a new company record at $1.4 million, and cash flow from operations significantly increased to $2.9 million for the quarter. Despite a 4% decline in transaction revenue compared to the prior year, the company's strategic focus on AI-based products and a disciplined sales and marketing strategy has positioned it well for future growth, with AI product sales experiencing strong momentum, particularly in the B2B enterprise license segment, which saw a 180% year-over-year increase.Research Solutions Financial Statement Overview
Summary
Research Solutions demonstrates strong revenue growth and cash flow generation. The balance sheet is stable with no debt, but profitability challenges due to negative net income and low return on equity suggest the need for improved cost management.Income Statement
Research Solutions shows a steady revenue growth trajectory with a significant increase of approximately 21.2% in TTM (Trailing-Twelve-Months) compared to the previous period. However, profitability metrics such as the net profit margin are concerning, with a substantial negative net income in TTM, indicating challenges in cost management despite the higher revenue growth.73
Positive
Balance Sheet
The company's balance sheet demonstrates stability with a strong equity base, evidenced by an equity ratio of 26% in TTM. The absence of debt is a positive indicator of financial prudence. However, the relatively low return on equity of -64.6% in TTM due to negative net income suggests inefficiencies in generating profits from shareholders' equity.68
Positive
Cash Flow
The cash flow statement highlights a strong free cash flow generation, with a growth rate of 67.6% in TTM. The operating cash flow to net income ratio is positive, at -0.008 in TTM, indicating that the company is generating cash from operations despite negative earnings. This suggests a potential for operational resilience and cash flow stability.75
Positive
| Breakdown | TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.70B | 44.62M | 37.70M | 32.93M | 31.76M | 31.06M |
| Gross Profit | 6.28B | 19.64M | 14.70M | 12.02M | 10.29M | 9.64M |
| EBITDA | 515.24M | 66.73K | 291.26K | -1.47M | -235.14K | -628.28K |
| Net Income | 212.34M | -3.79M | 571.62K | -1.63M | -285.09K | -779.69K |
Balance Sheet | ||||||
| Total Assets | 45.23M | 41.86M | 21.83M | 17.03M | 16.92M | 14.81M |
| Cash, Cash Equivalents and Short-Term Investments | 9.85M | 6.10M | 13.55M | 10.60M | 11.00M | 9.31M |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 79.33K |
| Total Liabilities | 34.00M | 30.17M | 14.50M | 12.14M | 11.49M | 9.95M |
| Stockholders Equity | 11.23M | 11.69M | 7.33M | 4.88M | 5.43M | 4.86M |
Cash Flow | ||||||
| Free Cash Flow | 6.70M | 3.48M | 3.34M | -461.49K | 1.85M | 2.42M |
| Operating Cash Flow | 6.73M | 3.55M | 3.38M | -417.20K | 1.87M | 2.42M |
| Investing Cash Flow | -25.32K | -10.10M | -344.66K | -44.29K | -19.85K | 0.00 |
| Financing Cash Flow | -1.07M | -905.85K | -97.26K | 63.27K | -159.97K | 1.55M |
Research Solutions Technical Analysis
Positive
2.95
Price Trends
2.82
Positive
2.87
Positive
3.08
Negative
Market Momentum
0.02
Negative
58.95
Neutral
86.11
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RSSS, the sentiment is Positive. The current price of 2.95 is above the 20-day moving average (MA) of 2.81, above the 50-day MA of 2.82, and below the 200-day MA of 3.08, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 58.95 is Neutral, neither overbought nor oversold. The STOCH value of 86.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RSSS.
Research Solutions Risk Analysis
Research Solutions disclosed 31 risk factors in its most recent earnings report. Research Solutions 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
Research Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
59 Neutral | $92.83M | ― | -30.88% | ― | 18.51% | -714.65% | |
59 Neutral | $97.45M | ― | -223.65% | ― | 221.24% | 13.36% | |
56 Neutral | $3.18B | 5.02 | -5.68% | 5.66% | 8.05% | -41.83% | |
46 Neutral | $132.04M | ― | -41.79% | ― | ― | 87.49% | |
45 Neutral | $92.14M | ― | -137.76% | ― | -23.04% | 11.60% | |
40 Underperform | $53.84M | ― | -208.78% | ― | -8.17% | 63.63% | |
33 Underperform | $34.45M | ― | -144.73% | ― | ― | ― |
* Technology Sector Average
Performance Comparison
RSSS
Research Solutions
2.95
0.40
15.69%
ALTS
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7.88
5.78
275.24%
LPSN
Liveperson
1.07
0.44
69.84%
UPLD
Upland Software
1.97
-0.69
-25.94%
PSQH
PSQ Holdings
2.17
-1.32
-37.82%
CSAI
Cloudastructure, Inc. Class A
2.30
-23.11
-90.95%
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.