RESOURCES CONNECTION INC (RGP) Stock Fundamental Analysis
NASDAQ:RGP - Nasdaq - US76122Q1058 - Common Stock - Currency: USD
Overall RGP gets a fundamental rating of 5 out of 10. We evaluated RGP against 82 industry peers in the Professional Services industry. RGP has an excellent financial health rating, but there are some minor concerns on its profitability. RGP is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
RGP had positive earnings in the past year.
In the past year RGP had a positive cash flow from operations.
In the past 5 years RGP has always been profitable.
RGP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of -28.75%, RGP is doing worse than 87.80% of the companies in the same industry.
Looking at the Return On Equity, with a value of -38.87%, RGP is doing worse than 79.27% of the companies in the same industry.
With a Return On Invested Capital value of 2.43%, RGP perfoms like the industry average, outperforming 40.24% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for RGP is below the industry average of 12.61%.
The last Return On Invested Capital (2.43%) for RGP is well below the 3 year average (10.28%), which needs to be investigated, but indicates that RGP had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -28.75% | ||
| ROE | -38.87% | ||
| ROIC | 2.43% |
ROA(3y)8.63%
ROA(5y)7.22%
ROE(3y)12.06%
ROE(5y)10.63%
ROIC(3y)10.28%
ROIC(5y)8.66%
1.3 Margins
RGP's Profit Margin has declined in the last couple of years.
The Operating Margin of RGP (1.80%) is comparable to the rest of the industry.
RGP's Operating Margin has declined in the last couple of years.
RGP has a Gross Margin (37.67%) which is comparable to the rest of the industry.
RGP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.8% | ||
| PM (TTM) | N/A | ||
| GM | 37.67% |
OM growth 3Y-7.52%
OM growth 5Y-8.17%
PM growth 3Y-6.01%
PM growth 5Y-5.11%
GM growth 3Y0.47%
GM growth 5Y0.08%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RGP is creating some value.
Compared to 1 year ago, RGP has about the same amount of shares outstanding.
The number of shares outstanding for RGP has been increased compared to 5 years ago.
There is no outstanding debt for RGP. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
RGP has an Altman-Z score of 2.91. This is not the best score and indicates that RGP is in the grey zone with still only limited risk for bankruptcy at the moment.
RGP has a Altman-Z score (2.91) which is comparable to the rest of the industry.
There is no outstanding debt for RGP. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 2.91 |
ROIC/WACC0.27
WACC9.05%
2.3 Liquidity
RGP has a Current Ratio of 2.63. This indicates that RGP is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of RGP (2.63) is better than 84.15% of its industry peers.
RGP has a Quick Ratio of 2.63. This indicates that RGP is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 2.63, RGP belongs to the best of the industry, outperforming 84.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.63 | ||
| Quick Ratio | 2.63 |
3. Growth
3.1 Past
The earnings per share for RGP have decreased strongly by -65.14% in the last year.
Measured over the past years, RGP shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.04% on average per year.
RGP shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -16.27%.
RGP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -2.79% yearly.
EPS 1Y (TTM)-65.14%
EPS 3Y-4.27%
EPS 5Y-1.04%
EPS Q2Q%-147.06%
Revenue 1Y (TTM)-16.27%
Revenue growth 3Y0.17%
Revenue growth 5Y-2.79%
Sales Q2Q%-14.45%
3.2 Future
RGP is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -24.13% yearly.
The Revenue is expected to grow by 1.56% on average over the next years.
EPS Next Y-88.05%
EPS Next 2Y-24.13%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-12.6%
Revenue Next 2Y-4.73%
Revenue Next 3Y1.56%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 14.50, the valuation of RGP can be described as correct.
RGP's Price/Earnings ratio is a bit cheaper when compared to the industry. RGP is cheaper than 74.39% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.60. RGP is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 10.29, the valuation of RGP can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RGP indicates a rather cheap valuation: RGP is cheaper than 81.71% of the companies listed in the same industry.
RGP's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.5 | ||
| Fwd PE | 10.29 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RGP is valued cheaply inside the industry as 90.24% of the companies are valued more expensively.
RGP's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. RGP is more expensive than 65.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 65.85 | ||
| EV/EBITDA | 5.92 |
4.3 Compensation for Growth
A cheap valuation may be justified as RGP's earnings are expected to decrease with -24.13% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-24.13%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.52%, RGP is a good candidate for dividend investing.
In the last 3 months the price of RGP has falen by -20.03%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 2.12, RGP pays a better dividend. On top of this RGP pays more dividend than 98.78% of the companies listed in the same industry.
RGP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.52% |
5.2 History
The dividend of RGP has a limited annual growth rate of 1.89%.
RGP has paid a dividend for at least 10 years, which is a reliable track record.
As RGP did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)1.89%
Div Incr Years0
Div Non Decr Years8
5.3 Sustainability
RGP has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-17.36%
EPS Next 2Y-24.13%
EPS Next 3YN/A
5.51
-0.02 (-0.36%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners85.88%
Inst Owner ChangeN/A
Ins Owners2.57%
Ins Owner Change0.36%
Market Cap182.22M
Analysts48
Price Target9.18 (66.61%)
Short Float %2.08%
Short Ratio2.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.52% |
Yearly Dividend0.56
Dividend Growth(5Y)1.89%
DP-17.36%
Div Incr Years0
Div Non Decr Years8
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2636.34%
Min EPS beat(2)20.79%
Max EPS beat(2)5251.89%
EPS beat(4)3
Avg EPS beat(4)1362.68%
Min EPS beat(4)-100%
Max EPS beat(4)5251.89%
EPS beat(8)7
Avg EPS beat(8)727.74%
EPS beat(12)11
Avg EPS beat(12)494.35%
EPS beat(16)15
Avg EPS beat(16)397.12%
Revenue beat(2)1
Avg Revenue beat(2)1.9%
Min Revenue beat(2)-1.42%
Max Revenue beat(2)5.22%
Revenue beat(4)2
Avg Revenue beat(4)1.62%
Min Revenue beat(4)-1.7%
Max Revenue beat(4)5.22%
Revenue beat(8)3
Avg Revenue beat(8)0.52%
Revenue beat(12)6
Avg Revenue beat(12)0.64%
Revenue beat(16)10
Avg Revenue beat(16)1.39%
PT rev (1m)-25%
PT rev (3m)-19.4%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-125%
EPS NY rev (1m)0%
EPS NY rev (3m)-18.52%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-10.92%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.5 | ||
| Fwd PE | 10.29 | ||
| P/S | 0.33 | ||
| P/FCF | 65.85 | ||
| P/OCF | 34.29 | ||
| P/B | 0.66 | ||
| P/tB | 1.14 | ||
| EV/EBITDA | 5.92 |
EPS(TTM)0.38
EY6.9%
EPS(NY)0.54
Fwd EY9.72%
FCF(TTM)0.08
FCFY1.52%
OCF(TTM)0.16
OCFY2.92%
SpS16.94
BVpS8.4
TBVpS4.82
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -28.75% | ||
| ROE | -38.87% | ||
| ROCE | 3.34% | ||
| ROIC | 2.43% | ||
| ROICexc | 3.19% | ||
| ROICexgc | 6.62% | ||
| OM | 1.8% | ||
| PM (TTM) | N/A | ||
| GM | 37.67% | ||
| FCFM | 0.49% |
ROA(3y)8.63%
ROA(5y)7.22%
ROE(3y)12.06%
ROE(5y)10.63%
ROIC(3y)10.28%
ROIC(5y)8.66%
ROICexc(3y)13.68%
ROICexc(5y)11.32%
ROICexgc(3y)41.16%
ROICexgc(5y)34.71%
ROCE(3y)14.15%
ROCE(5y)11.92%
ROICexcg growth 3Y-5.93%
ROICexcg growth 5Y-14.66%
ROICexc growth 3Y-5.91%
ROICexc growth 5Y-13.1%
OM growth 3Y-7.52%
OM growth 5Y-8.17%
PM growth 3Y-6.01%
PM growth 5Y-5.11%
GM growth 3Y0.47%
GM growth 5Y0.08%
F-Score5
Asset Turnover1.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 30.02% | ||
| Cap/Sales | 0.45% | ||
| Interest Coverage | 28.35 | ||
| Cash Conversion | 28.65% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.63 | ||
| Quick Ratio | 2.63 | ||
| Altman-Z | 2.91 |
F-Score5
WACC9.05%
ROIC/WACC0.27
Cap/Depr(3y)23.98%
Cap/Depr(5y)27.19%
Cap/Sales(3y)0.27%
Cap/Sales(5y)0.35%
Profit Quality(3y)104.77%
Profit Quality(5y)124.84%
High Growth Momentum
Growth
EPS 1Y (TTM)-65.14%
EPS 3Y-4.27%
EPS 5Y-1.04%
EPS Q2Q%-147.06%
EPS Next Y-88.05%
EPS Next 2Y-24.13%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-16.27%
Revenue growth 3Y0.17%
Revenue growth 5Y-2.79%
Sales Q2Q%-14.45%
Revenue Next Year-12.6%
Revenue Next 2Y-4.73%
Revenue Next 3Y1.56%
Revenue Next 5YN/A
EBIT growth 1Y-74.27%
EBIT growth 3Y-7.36%
EBIT growth 5Y-10.73%
EBIT Next Year-3.83%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-96.89%
FCF growth 3Y-16.81%
FCF growth 5Y-10.77%
OCF growth 1Y-94.14%
OCF growth 3Y-18.13%
OCF growth 5Y-12.86%