RESEARCH SOLUTIONS INC (RSSS) Stock Fundamental Analysis
NASDAQ:RSSS - Nasdaq - US7610251057 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to RSSS. RSSS was compared to 82 industry peers in the IT Services industry. RSSS scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. RSSS is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
RSSS had negative earnings in the past year.
RSSS had a positive operating cash flow in the past year.
RSSS had negative earnings in 4 of the past 5 years.
RSSS had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of RSSS (-8.66%) is worse than 71.95% of its industry peers.
Looking at the Return On Equity, with a value of -34.87%, RSSS is doing worse than 69.51% of the companies in the same industry.
The Return On Invested Capital of RSSS (7.17%) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -8.66% | ||
| ROE | -34.87% | ||
| ROIC | 7.17% |
ROA(3y)-5.34%
ROA(5y)-4.44%
ROE(3y)-19.34%
ROE(5y)-15.39%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Operating Margin, with a value of 3.79%, RSSS is in line with its industry, outperforming 48.78% of the companies in the same industry.
RSSS has a Gross Margin of 48.20%. This is in the better half of the industry: RSSS outperforms 65.85% of its industry peers.
In the last couple of years the Gross Margin of RSSS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.79% | ||
| PM (TTM) | N/A | ||
| GM | 48.2% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y10.75%
GM growth 5Y8.73%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RSSS is destroying value.
The number of shares outstanding for RSSS has been increased compared to 1 year ago.
RSSS has more shares outstanding than it did 5 years ago.
RSSS 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
RSSS has an Altman-Z score of 1.80. This is a bad value and indicates that RSSS is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.80, RSSS is doing worse than 65.85% of the companies in the same industry.
There is no outstanding debt for RSSS. 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 | 1.8 |
ROIC/WACC0.76
WACC9.5%
2.3 Liquidity
RSSS has a Current Ratio of 0.76. This is a bad value and indicates that RSSS is not financially healthy enough and could expect problems in meeting its short term obligations.
RSSS's Current ratio of 0.76 is on the low side compared to the rest of the industry. RSSS is outperformed by 86.59% of its industry peers.
RSSS has a Quick Ratio of 0.76. This is a bad value and indicates that RSSS is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of RSSS (0.76) is worse than 85.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
RSSS shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -693.75%.
RSSS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.85%.
The Revenue has been growing by 9.16% on average over the past years. This is quite good.
EPS 1Y (TTM)-693.75%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%400%
Revenue 1Y (TTM)14.85%
Revenue growth 3Y12%
Revenue growth 5Y9.16%
Sales Q2Q%4.5%
3.2 Future
Based on estimates for the next years, RSSS will show a very strong growth in Earnings Per Share. The EPS will grow by 52.03% on average per year.
RSSS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.13% yearly.
EPS Next Y86.72%
EPS Next 2Y70.38%
EPS Next 3Y52.03%
EPS Next 5YN/A
Revenue Next Year10.91%
Revenue Next 2Y9.18%
Revenue Next 3Y9.13%
Revenue Next 5YN/A
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings Ratio is negative for RSSS. In the last year negative earnings were reported.
A Price/Forward Earnings ratio of 22.84 indicates a rather expensive valuation of RSSS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RSSS is on the same level as its industry peers.
RSSS's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 22.84 |
4.2 Price Multiples
RSSS's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RSSS indicates a rather cheap valuation: RSSS is cheaper than 89.02% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.79 | ||
| EV/EBITDA | 26.04 |
4.3 Compensation for Growth
RSSS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as RSSS's earnings are expected to grow with 52.03% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y70.38%
EPS Next 3Y52.03%
5. Dividend
5.1 Amount
No dividends for RSSS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
2.64
-0.14 (-5.04%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners45.07%
Inst Owner Change-0.68%
Ins Owners16.54%
Ins Owner Change-1.87%
Market Cap85.69M
Analysts82.22
Price Target4.77 (80.68%)
Short Float %0.07%
Short Ratio0.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-565.43%
Min EPS beat(2)-1128.9%
Max EPS beat(2)-1.96%
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-2.98%
Min Revenue beat(2)-4.67%
Max Revenue beat(2)-1.28%
Revenue beat(4)1
Avg Revenue beat(4)-1.59%
Min Revenue beat(4)-4.67%
Max Revenue beat(4)0.37%
Revenue beat(8)2
Avg Revenue beat(8)-0.58%
Revenue beat(12)6
Avg Revenue beat(12)0.49%
Revenue beat(16)8
Avg Revenue beat(16)0.1%
PT rev (1m)-9.66%
PT rev (3m)-8.63%
EPS NQ rev (1m)-80.02%
EPS NQ rev (3m)-80.02%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.03%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 22.84 | ||
| P/S | 1.76 | ||
| P/FCF | 12.79 | ||
| P/OCF | 12.74 | ||
| P/B | 7.63 | ||
| P/tB | N/A | ||
| EV/EBITDA | 26.04 |
EPS(TTM)-0.19
EYN/A
EPS(NY)0.12
Fwd EY4.38%
FCF(TTM)0.21
FCFY7.82%
OCF(TTM)0.21
OCFY7.85%
SpS1.5
BVpS0.35
TBVpS-0.47
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -8.66% | ||
| ROE | -34.87% | ||
| ROCE | 9.08% | ||
| ROIC | 7.17% | ||
| ROICexc | 13.92% | ||
| ROICexgc | N/A | ||
| OM | 3.79% | ||
| PM (TTM) | N/A | ||
| GM | 48.2% | ||
| FCFM | 13.74% |
ROA(3y)-5.34%
ROA(5y)-4.44%
ROE(3y)-19.34%
ROE(5y)-15.39%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y10.75%
GM growth 5Y8.73%
F-Score7
Asset Turnover1.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 2.04% | ||
| Cap/Sales | 0.05% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 217.89% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 1.8 |
F-Score7
WACC9.5%
ROIC/WACC0.76
Cap/Depr(3y)102.85%
Cap/Depr(5y)101.71%
Cap/Sales(3y)0.14%
Cap/Sales(5y)0.1%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-693.75%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%400%
EPS Next Y86.72%
EPS Next 2Y70.38%
EPS Next 3Y52.03%
EPS Next 5YN/A
Revenue 1Y (TTM)14.85%
Revenue growth 3Y12%
Revenue growth 5Y9.16%
Sales Q2Q%4.5%
Revenue Next Year10.91%
Revenue Next 2Y9.18%
Revenue Next 3Y9.13%
Revenue Next 5YN/A
EBIT growth 1Y254.27%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year940.62%
EBIT Next 3Y144.44%
EBIT Next 5YN/A
FCF growth 1Y270.17%
FCF growth 3Y23.44%
FCF growth 5Y44.1%
OCF growth 1Y263.54%
OCF growth 3Y23.83%
OCF growth 5Y43.68%