RESOURCES CONNECTION INC (RGP) Stock Fundamental Analysis
NASDAQ:RGP - Nasdaq - US76122Q1058 - Common Stock - Currency: USD
RGP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 82 industry peers in the Professional Services industry. RGP has a great financial health rating, but its profitability evaluates not so good. RGP is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year RGP was profitable.
RGP had a positive operating cash flow in the past year.
RGP had positive earnings in each of the past 5 years.
RGP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
RGP has a Return On Assets of -28.75%. This is amonst the worse of the industry: RGP underperforms 89.02% of its industry peers.
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.
RGP has a Return On Invested Capital of 1.48%. This is in the lower half of the industry: RGP underperforms 64.63% of its industry peers.
RGP had an Average Return On Invested Capital over the past 3 years of 10.28%. This is below the industry average of 12.96%.
The 3 year average ROIC (10.28%) for RGP is well above the current ROIC(1.48%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -28.75% | ||
| ROE | -38.87% | ||
| ROIC | 1.48% |
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.
RGP's Operating Margin of 1.10% is on the low side compared to the rest of the industry. RGP is outperformed by 65.85% of its industry peers.
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.
In the last couple of years the Gross Margin of RGP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.1% | ||
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so RGP is still creating some value.
RGP has about the same amout of shares outstanding than it did 1 year ago.
RGP has more shares outstanding than it did 5 years ago.
RGP has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
RGP has an Altman-Z score of 2.79. 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.
Looking at the Altman-Z score, with a value of 2.79, RGP is in line with its industry, outperforming 47.56% of the companies in the same industry.
RGP has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 2.79 |
ROIC/WACC0.16
WACC9.18%
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.
RGP's Current ratio of 2.63 is amongst the best of the industry. RGP outperforms 85.37% of its industry peers.
A Quick Ratio of 2.63 indicates that RGP has no problem at all paying its short term obligations.
RGP's Quick ratio of 2.63 is amongst the best of the industry. RGP outperforms 85.37% of its industry peers.
| 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.
The Earnings Per Share has been decreasing by -1.04% on average over the past years.
Looking at the last year, RGP shows a very negative growth in Revenue. The Revenue has decreased by -16.27% in the last year.
Measured over the past years, RGP shows a decrease in Revenue. The Revenue has been decreasing by -2.79% on average per year.
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
Based on estimates for the next years, RGP will show a very negative growth in Earnings Per Share. The EPS will decrease by -24.13% on average per year.
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
A Price/Earnings ratio of 13.00 indicates a correct valuation of RGP.
Compared to the rest of the industry, the Price/Earnings ratio of RGP indicates a somewhat cheap valuation: RGP is cheaper than 76.83% of the companies listed in the same industry.
RGP is valuated rather cheaply when we compare the Price/Earnings ratio to 25.82, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 9.23, the valuation of RGP can be described as very reasonable.
Based on the Price/Forward Earnings ratio, RGP is valued cheaply inside the industry as 84.15% of the companies are valued more expensively.
RGP's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13 | ||
| Fwd PE | 9.23 |
4.2 Price Multiples
87.80% of the companies in the same industry are more expensive than RGP, based on the Enterprise Value to EBITDA ratio.
63.41% of the companies in the same industry are cheaper than RGP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 59.04 | ||
| EV/EBITDA | 6.46 |
4.3 Compensation for Growth
RGP's earnings are expected to decrease with -24.13% in the coming years. This may justify a cheaper valuation.
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 5.19%, RGP is a good candidate for dividend investing.
The stock price of RGP dropped by -34.22% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
RGP's Dividend Yield is rather good when compared to the industry average which is at 1.98. RGP pays more dividend than 98.78% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, RGP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.19% |
5.2 History
The dividend of RGP has a limited annual growth rate of 1.89%.
RGP has been paying a dividend for at least 10 years, so it has a reliable track record.
RGP has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
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
4.94
-0.11 (-2.18%)
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 Cap163.37M
Analysts48
Price Target12.24 (147.77%)
Short Float %2.15%
Short Ratio2.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.19% |
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)7.46%
PT rev (3m)-8.57%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-116.67%
EPS NY rev (1m)0%
EPS NY rev (3m)-18.52%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-8.78%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13 | ||
| Fwd PE | 9.23 | ||
| P/S | 0.29 | ||
| P/FCF | 59.04 | ||
| P/OCF | 30.74 | ||
| P/B | 0.59 | ||
| P/tB | 1.02 | ||
| EV/EBITDA | 6.46 |
EPS(TTM)0.38
EY7.69%
EPS(NY)0.54
Fwd EY10.84%
FCF(TTM)0.08
FCFY1.69%
OCF(TTM)0.16
OCFY3.25%
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 | 2.04% | ||
| ROIC | 1.48% | ||
| ROICexc | 1.95% | ||
| ROICexgc | 4.04% | ||
| OM | 1.1% | ||
| 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 | 17.33 | ||
| Cash Conversion | 36.31% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.63 | ||
| Quick Ratio | 2.63 | ||
| Altman-Z | 2.79 |
F-Score5
WACC9.18%
ROIC/WACC0.16
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-84.27%
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%