Research Solutions (RSSS) AI Stock Analysis

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Research Solutions

(NASDAQ:RSSS)

Rating:59Neutral

Price Target:―

Research Solutions has a solid revenue growth trajectory and strong cash flow generation, but profitability challenges and weak technical indicators weigh on its score. While the earnings call showed positive growth, valuation remains a concern with a negative P/E ratio. The overall outlook suggests cautious optimism, focusing on addressing profitability and technical weaknesses.

Positive Factors

Financial Health

With $7.7M in cash, no debt, and projections for positive free cash flow, there is sufficient capital to support organic growth.

Revenue Growth

The high-margin subscription/SaaS platform segment is driving 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

External Risks

Government and academic budget cuts could potentially impact business.

Market Valuation

Shares trade at an EV/revenue multiple of 1.9x based on CY26E revenue versus a peer group average at 3.3x, indicating potential undervaluation.

Research Solutions (RSSS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$89.91M

Dividend YieldN/A

Average Volume (3M)39.04K

Price to Earnings (P/E)―

Beta (1Y)0.10

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. Volume29,685

30 Day Avg. Volume39,038

Financial Highlights & Ratios

PEG Ratio0.23

Price to Book (P/B)8.42

Price to Sales (P/S)0.00

P/FCF Ratio17.25

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$5.12

Price Target Upside83.51% 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: -0.71%|

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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
48.21M	44.62M	37.70M	32.93M	31.76M	31.06M
	Gross Profit
22.40M	19.64M	14.70M	12.02M	10.29M	9.64M
	EBIT
1.51M	-769.54K	238.61K	-1.49M	-318.99K	-832.37K
	EBITDA
588.22K	66.73K	291.26K	-1.47M	-235.14K	-628.28K
	Net Income Common Stockholders
-4.06M	-3.79M	571.62K	-1.63M	-285.09K	-779.69K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.70M	6.10M	13.55M	10.60M	11.00M	9.31M
	Total Assets
42.79M	41.86M	21.83M	17.03M	16.92M	14.81M
	Total Debt
0.00	0.00	0.00	0.00	0.00	79.33K
	Net Debt
-7.70M	-6.10M	-13.55M	-10.60M	-11.00M	-9.23M
	Total Liabilities
31.66M	30.17M	14.50M	12.14M	11.49M	9.95M
	Stockholders Equity
11.13M	11.69M	7.33M	4.88M	5.43M	4.86M
Cash Flow		Free Cash Flow
5.83M	3.48M	3.34M	-461.49K	1.85M	2.42M
	Operating Cash Flow
5.85M	3.55M	3.38M	-417.20K	1.87M	2.42M
	Investing Cash Flow
-19.15K	-10.10M	-344.66K	-44.29K	-19.85K	0.00
	Financing Cash Flow
-826.75K	-905.85K	-97.26K	63.27K	-159.97K	1.55M

Research Solutions Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.79

Price Trends

50DMA

2.72

Positive

100DMA

3.03

Negative

200DMA

3.07

Negative

Market Momentum

MACD

<0.01

Positive

RSI

48.42

Neutral

STOCH

35.84

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RSSS, the sentiment is Negative. The current price of 2.79 is below the 20-day moving average (MA) of 2.86, above the 50-day MA of 2.72, and below the 200-day MA of 3.07, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 48.42 is Neutral, neither overbought nor oversold. The STOCH value of 35.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$11.80B	10.31	-7.45%	2.91%	7.43%	-7.78%
RSSS	59 Neutral	$89.91M	―	-30.88%	―	18.51%	-714.65%
PSQH	58 Neutral	$113.85M	―	-223.65%	―	221.24%	13.36%
LPSN	47 Neutral	$73.51M	―	-137.76%	―	-23.04%	11.60%
ALTS	46 Neutral	$178.21M	―	-41.79%	―	―	87.49%
UPLD	40 Underperform	$51.56M	―	-208.78%	―	-8.17%	63.63%
CSAI	33 Underperform	$41.64M	―	-144.73%	―	―	―

* Technology Sector Average

Performance Comparison

RSSS

Research Solutions

2.79

0.21

8.14%

ALTS

ALT5 Sigma Corporation

9.93

7.26

271.91%

LPSN

Liveperson

0.78

0.15

23.81%

UPLD

Upland Software

1.83

-0.58

-24.07%

PSQH

PSQ Holdings

2.53

-1.08

-29.92%

CSAI

Cloudastructure, Inc. Class A

2.34

-23.07

-90.79%

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.