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RF Capital Group (TSE:RCG)
TSX:RCG
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RF Capital Group
(TSX:RCG)
Rating:66Neutral
Price Target:
C$11.00
▲(13.99%Upside)
RF Capital Group (RCG) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$139.45M
Dividend YieldN/A
Average Volume (3M)5.94K
Price to Earnings (P/E)―
Beta (1Y)0.93
Revenue Growth7.39%
EPS Growth49.83%
CountryCA
Employees843
SectorFinancial
Sector Strength74
IndustryAsset Management
Share Statistics
EPS (TTM)-0.33
Shares Outstanding15,722,926
10 Day Avg. Volume6,774
30 Day Avg. Volume5,937
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)0.44
Price to Sales (P/S)0.00
P/FCF Ratio4.19
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$13.21Price Target Upside36.91% Upside
Rating ConsensusHold
Number of Analyst Covering1
RF Capital Group Business Overview & Revenue Model
Company DescriptionRF Capital Group Inc., together with its subsidiaries, provides wealth management services to high-net worth and ultra-high-net worth individuals in Canada. The company offers portfolio management and investment advisory services, as well as distributes securities, investment funds, and insurance products. It also provides financial, tax, estate, succession, retirement, risk management, and philanthropic planning services. The company was formerly known as GMP Capital Inc. and changed its name to RF Capital Group Inc. in November 2020. RF Capital Group Inc. was founded in 1995 and is headquartered in Toronto, Canada.
How the Company Makes MoneyRF Capital Group makes money primarily through its wealth management services, which include investment advisory and portfolio management. The company earns revenue through management fees, which are typically a percentage of the assets under management (AUM). These fees are charged to clients in exchange for personalized financial advice, investment planning, and portfolio management services. Additionally, RCG may generate income from transaction fees on trades executed on behalf of clients, as well as performance fees for achieving specific investment benchmarks. The company may also engage in strategic partnerships with other financial institutions to enhance its service offerings and expand its client base, further contributing to its revenue streams.
RF Capital Group Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q3-2024)
| % Change Since: 16.83%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with notable revenue and asset growth, successful recruitment, and positive employee engagement. However, these were offset by significant declines in interest income and adjusted EBITDA, onetime leadership transition costs, and the departure of advisory teams.Q3-2024 Updates
Positive Updates
Increase in Revenue
For the third quarter of 2024, RF Capital reported $91.9 million in revenue, an increase of 5% compared to the third quarter of 2023.
Growth in Fee Revenue
Fee revenue, the largest component of RF Capital's revenue, increased by 7% compared to Q3 2023, driven by an increase in Assets Under Administration (AUA).
Positive Employee Engagement
For the 7th consecutive year, RF Capital was certified as a great place to work, with 87% of participants expressing pride in their workplace, up from 84% last year.
Strong Recruiting Pipeline
RF Capital's recruiting pipeline stands at over $29 billion, with successful recruitment of several high-profile teams in the last quarter.
Increase in Assets
RF Capital's assets increased by $3.8 billion since the beginning of the year, with an additional $400 million growth in October.
Negative Updates
Decline in Interest Income
Interest income declined by 18% due to lower client cash balances, continuing a trend from the past two quarters.
Decrease in Adjusted EBITDA
Adjusted EBITDA was $12.5 million in Q3 2024, a decrease from $16.9 million in Q3 2023, due to higher operating expenses.
Two Team Departures
Two advisory teams with assets under management of approximately $456 million departed during the quarter.
Onetime Leadership Transition Costs
RF Capital incurred onetime costs related to leadership transitions, impacting operating expenses and resulting in a decrease in cash flow available for growth.
Company Guidance
During the third quarter 2024 earnings call for RF Capital, several key metrics and future guidance were highlighted. The company's assets under management increased by $3.8 billion since the start of the year, with an additional $400 million growth in October alone. Fee-based revenues reached $204.5 million for the nine months ending September 30, 2024, marking a 6% increase compared to the same period last year. However, adjusted EBITDA showed a decline, recording $41.1 million for the nine-month period, down 9% from the previous year. The adjusted net income stood at $6.5 million, up by $2.9 million year-over-year. The recruiting pipeline was robust, with assets over $29 billion in view. Looking ahead, the company expects AUA to align with equity market returns and recruiting activity, while interest revenue is projected to decline with lower benchmark rates. Meanwhile, operating expenses are expected to remain under control, with cash flow primarily directed towards expanding the advisor network.RF Capital Group Financial Statement Overview
Summary
RF Capital Group's financial performance reflects a positive turnaround with strong revenue and profit growth, improved margins, and a healthier cash flow position. However, the balance sheet indicates moderate financial risk with room for improvement in equity utilization.Income Statement
RF Capital Group has demonstrated a strong revenue growth trajectory with a 6.52% increase from 2023 to 2024. Gross profit margin improved from 50.21% in 2023 to 57.69% in 2024, indicating efficient cost management. The net profit margin turned positive at 0.15% in 2024 from a negative 3.43% in 2023, showcasing a turnaround in profitability. However, the EBIT margin was 0%, reflecting challenges in achieving operational efficiency, and the EBITDA margin slightly declined to 15.52% from 14.60% in 2023.72
Positive
Balance Sheet
The company's balance sheet shows a stable equity base with a debt-to-equity ratio of 0.49, demonstrating moderate leverage. Return on equity improved but remained low at 0.17%, indicating limited profitability relative to equity. The equity ratio decreased to 22.42% from 23.96% in 2023, suggesting a slight increase in leverage. Overall, the balance sheet indicates moderate financial risk with room for improvement in equity utilization.65
Positive
Cash Flow
RF Capital Group showed a strong recovery in free cash flow from negative $273.68 million in 2023 to positive $20.91 million in 2024, indicating improved cash generation. The operating cash flow to net income ratio is robust at 41.82, reflecting effective conversion of revenue into cash. The free cash flow to net income ratio of 36.82 highlights efficient cash flow management, though the historical volatility in cash flow remains a concern.68
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 369.33M | 346.75M | 353.97M | 321.79M | 80.53M |
| Gross Profit | 213.09M | 174.07M | 204.22M | 179.18M | 56.81M |
| EBITDA | 57.34M | 50.62M | 53.02M | 22.64M | 53.06M |
| Net Income | 568.00K | -11.89M | -4.80M | -20.15M | 28.75M |
Balance Sheet | |||||
| Total Assets | 1.46B | 1.38B | 1.70B | 2.22B | 2.12B |
| Cash, Cash Equivalents and Short-Term Investments | 90.15M | 80.83M | 367.85M | 518.10M | 556.25M |
| Total Debt | 160.36M | 170.60M | 142.95M | 117.37M | 137.66M |
| Total Liabilities | 1.13B | 1.05B | 1.35B | 1.86B | 1.74B |
| Stockholders Equity | 326.98M | 330.54M | 346.92M | 354.89M | 379.86M |
Cash Flow | |||||
| Free Cash Flow | 20.91M | -273.68M | -136.44M | -23.54M | 3.04M |
| Operating Cash Flow | 23.75M | -268.50M | -107.40M | -14.21M | 5.38M |
| Investing Cash Flow | -3.83M | -5.19M | -29.04M | -9.34M | 83.89M |
| Financing Cash Flow | -13.18M | -13.34M | -13.80M | -14.64M | -50.00M |
RF Capital Group Technical Analysis
Positive
9.65
Price Trends
8.86
Positive
9.16
Positive
8.76
Positive
Market Momentum
0.26
Positive
52.94
Neutral
68.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RCG, the sentiment is Positive. The current price of 9.65 is below the 20-day moving average (MA) of 9.78, above the 50-day MA of 8.86, and above the 200-day MA of 8.76, indicating a neutral trend. The MACD of 0.26 indicates Positive momentum. The RSI at 52.94 is Neutral, neither overbought nor oversold. The STOCH value of 68.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:RCG.
RF Capital Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $17.19B | 11.20 | 9.70% | 3.58% | 11.11% | -4.55% | |
66 Neutral | $139.45M | ― | -0.71% | ― | 7.39% | 49.83% | |
| ― | $7.85M | 5.05 | 17.93% | ― | ― | ― | |
72 Outperform | C$121.06M | 36.19 | 25.24% | 1.63% | 24.60% | 66.30% | |
58 Neutral | C$278.87M | ― | 0.37% | ― | 67.83% | 68.03% | |
| ― | $6.92M | 7.15 | -36.58% | 2.01% | ― | ― | |
61 Neutral | C$145.88M | 11.68 | 10.47% | ― | -19.24% | ― |
* Financial Sector Average
Performance Comparison
TSE:RCG
RF Capital Group
9.65
1.94
25.16%
ASXSF
Elysee Development
0.29
0.06
26.09%
TSE:AIM
Aimia Inc.
3.04
0.37
13.86%
TSE:LPC
Lorne Park Capital
2.22
0.85
62.04%
PYCFF
Mount Logan Capital
1.55
0.02
1.31%
TSE:STCK
Stack Capital Group
13.65
3.65
36.50%
RF Capital Group Corporate Events
Shareholder MeetingsBusiness Operations and StrategyFinancial Disclosures
RF Capital Group Announces 2025 Annual Meeting Results
Positive
May 2, 2025
RF Capital Group Inc. announced the results of its 2025 annual meeting of shareholders, where all 11 director nominees were elected, and KPMG LLP was re-appointed as the external auditor. The meeting also featured discussions on the company’s 2024 financial highlights and first quarter 2025 results, along with management’s outlook for the year. This announcement reinforces RF Capital’s stable governance and continued focus on delivering strategic wealth management services, which may positively impact its market position and stakeholder confidence.
Business Operations and StrategyFinancial Disclosures
RF Capital Group Sees Revenue Growth Amid Market Volatility
Neutral
Apr 30, 2025
RF Capital Group reported an 11% increase in revenue for Q1 2025, reaching $99.4 million, driven by a 6% rise in assets under administration (AUA) to $39.2 billion due to strong equity markets and new asset gains. Despite the revenue growth, the company’s EBITDA decreased by 30% to $9.5 million due to increased operating expenses from balance sheet revaluation adjustments. The net loss also increased to $4.1 million, but cash from operating activities improved significantly. The company anticipates market volatility due to new U.S. trade policies and plans to focus on advisor recruitment using free cash flow.
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.