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Rf Capital Group Inc. (TSE:RCG)
:RCG

RF Capital Group (RCG) AI Stock Analysis

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RF Capital Group

(OTC:RCG)

Rating:55Neutral
Price Target:
RF Capital Group's overall stock score is moderately low at 55, primarily due to bearish technical signals and unattractive valuation metrics. While the company's financial performance shows a positive turnaround with revenue and profit growth, the stock faces significant technical and valuation challenges. Positive corporate events provide some support but are insufficient to offset the technical and valuation hurdles.

RF Capital Group (RCG) vs. iShares MSCI Canada ETF (EWC)

RF Capital Group Business Overview & Revenue Model

Company DescriptionRF Capital Group (RCG) is a Canadian-based financial services firm primarily focused on wealth management and investment advisory services. The company operates through its subsidiary, Richardson Wealth, catering to high-net-worth individuals and families. RCG aims to deliver a comprehensive suite of financial solutions, including portfolio management, financial planning, and investment strategy guidance.
How the Company Makes MoneyRF Capital Group makes money through several revenue streams, primarily driven by its wealth management and investment advisory services. The company's revenue model includes management fees charged based on assets under management (AUM), which fluctuate with the market value of client portfolios. Additionally, RCG earns income from trading commissions, advisory fees, and other service-related charges. Strategic partnerships and collaborations within the financial sector also contribute to its earnings by enhancing its service offerings and expanding its client base.

RF Capital Group Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q3-2024)
|
% Change Since: 1.94%|
Next Earnings Date:Jul 30, 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. The balance sheet remains stable with moderate leverage, but there is room for enhancing equity returns. Continued focus on operational efficiency and cash flow stability will be crucial for sustaining growth in the asset management industry.
Income Statement
72
Positive
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.
Balance Sheet
65
Positive
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.
Cash Flow
68
Positive
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
377.97M369.33M346.75M353.97M321.79M80.53M
Gross Profit
208.06M213.09M174.07M204.22M179.18M56.81M
EBIT
14.16M31.98M23.21M24.95M-2.17M47.32M
EBITDA
51.87M57.34M50.62M53.02M22.64M53.06M
Net Income Common Stockholders
-2.42M568.00K-11.89M-4.80M-20.15M28.75M
Balance SheetCash, Cash Equivalents and Short-Term Investments
518.10M90.15M80.83M367.85M518.10M556.25M
Total Assets
2.22B1.46B1.38B1.70B2.22B2.12B
Total Debt
117.37M160.36M170.60M142.95M117.37M137.66M
Net Debt
-400.73M71.81M89.77M-224.90M-400.73M-418.58M
Total Liabilities
1.86B1.13B1.05B1.35B1.86B1.74B
Stockholders Equity
354.89M326.98M330.54M346.92M354.89M379.86M
Cash FlowFree Cash Flow
34.33M20.91M-273.68M-136.44M-23.54M3.04M
Operating Cash Flow
41.00M23.75M-268.50M-107.40M-14.21M5.38M
Investing Cash Flow
-7.21M-3.83M-5.19M-29.04M-9.34M83.89M
Financing Cash Flow
-13.09M-13.18M-13.34M-13.80M-14.64M-50.00M

RF Capital Group Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price8.42
Price Trends
50DMA
8.70
Negative
100DMA
9.43
Negative
200DMA
8.46
Negative
Market Momentum
MACD
-0.09
Negative
RSI
51.90
Neutral
STOCH
56.90
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RCG, the sentiment is Neutral. The current price of 8.42 is above the 20-day moving average (MA) of 8.06, below the 50-day MA of 8.70, and below the 200-day MA of 8.46, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 51.90 is Neutral, neither overbought nor oversold. The STOCH value of 56.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:RCG.

RF Capital Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSLPC
73
Outperform
C$120.19M35.8725.24%1.54%24.60%66.30%
64
Neutral
$12.83B9.787.78%16985.64%12.26%-7.81%
TSELC
64
Neutral
$10.20M4.4417.93%-1649.37%
61
Neutral
C$130.92M10.4810.47%-19.24%
TSAIM
58
Neutral
C$275.66M0.37%67.83%68.03%
TSRCG
55
Neutral
C$121.75M-0.71%7.39%49.83%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:RCG
RF Capital Group
8.43
0.58
7.32%
TSE:ELC
Elysee Development
0.36
0.06
20.00%
TSE:AIM
Aimia Inc.
2.97
0.12
4.21%
TSE:LPC
Lorne Park Capital
2.20
0.74
50.68%
TSE:STCK
Stack Capital Group
12.25
2.19
21.77%

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.

Shareholder MeetingsFinancial Disclosures
RF Capital Group to Announce Q1 2025 Results and Host Annual Meeting
Neutral
Apr 1, 2025

RF Capital Group Inc. announced it will release its first quarter 2025 financial results on April 30, 2025, and host its annual shareholder meeting on May 1, 2025, in Toronto. The company is promoting electronic delivery of its meeting materials to reduce environmental impact and costs, reflecting its commitment to sustainability. The meeting will include discussions on financial and strategic highlights, with a live webcast available for broader access.

Executive/Board ChangesBusiness Operations and Strategy
Richardson Wealth Appoints Kevin Shubley to Enhance Advisory Growth
Positive
Mar 26, 2025

Richardson Wealth Limited, a subsidiary of RF Capital Group Inc., has appointed Kevin Shubley as SVP, Head of Advisory Experience and Growth. With over 20 years of experience, Shubley will oversee various strategic areas to enhance advisory practices and client service. This move aligns with Richardson Wealth’s mission to be a top destination for Canada’s leading advisors and their clients, reinforcing its commitment to operational excellence and superior client advice.

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.