Resources Connection, Inc. (RGP) Market Cap
Resources Connection, Inc. has a market capitalization of $139.7M.
Financials based on reported quarter end 2026-02-28
Price: $4.07
▲ 0.02 (0.49%)
Market Cap: 139.72M
NASDAQ · time unavailable
CEO: Roger D. Carlile
Sector: Industrials
Industry: Consulting Services
IPO Date: 2000-12-15
Website: https://rgp.com
Resources Connection, Inc. (RGP) - Company Information
Market Cap: 139.72M · Sector: Industrials
Resources Connection, Inc. provides consulting services to business customers under the Resources Global Professionals name in North America, Europe, and the Asia Pacific. The company offers services in the areas of transactions, including integration and divestitures, bankruptcy/restructuring, going public readiness and support, financial process optimization, and system implementation; and regulations, such as accounting regulations, internal audit and compliance, data privacy and security, healthcare compliance, and regulatory compliance. It also provides transformations services comprising finance transformation, digital transformation, supply chain management, cloud migration, and data design and analytics. The company has a strategic alliance with Kotter International, Inc. to accelerate joint business development initiatives. The company was formerly known as RC Transaction Corp. and changed its name to Resources Connection, Inc. in August 2000. Resources Connection, Inc. was founded in 1996 and is headquartered in Irvine, California.
Analyst Sentiment
Based on 18 ratings
Analyst 1Y Forecast: $0.00
Average target (based on 1 sources)
Consensus Price Target
Low
$13
Median
$13
High
$13
Average
$13
Potential Upside: 219.4%
Price & Moving Averages
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Fundamentals Overview
📊 AI Financial Analysis
Powered by StockMarketInfo"RGP (latest quarter ended 2026-02-28) reported revenue of $108.0m and net income of -$9.5m (EPS -$0.28). On a QoQ basis, revenue declined 8.3% (from $117.7m in 2025-11-29) while the net loss narrowed materially (net income improved ~25.2%, from -$12.7m). YoY growth rates were not directly computable because the dataset does not include the same fiscal quarter one year prior. Over the 4-quarter span, revenue trended down from $139.3m (2025-05-31) to $108.0m (2026-02-28), and profitability swung sharply—most notably the prior quarter 2025-05-31 had a much larger loss (-$73.3m). The latest net margin was about -8.8%, better than the immediately prior quarter (-10.8%), indicating partial margin recovery but not a return to sustainable profitability. Cash flow quality weakened QoQ: free cash flow fell from +$16.3m to -$8.0m, though dividends have remained steady (about $2.35m in the quarter; trailing yield ~1.9%). Balance sheet resilience appears intact with positive equity ($186.7m) and net cash (netDebt -$58.4m). Total shareholder return has been negative given the stock’s -29.4% 1-year move; dividend yield only partially offsets that decline. Despite this, analyst valuation shows substantial upside to the $13 consensus target."
Revenue Growth
Revenue declined 8.3% QoQ (117.7m -> 107.9m). Over 4 quarters, revenue fell from 139.3m to 107.9m (~-22.5%). YoY rates were not computable from the provided history.
Profitability
Net income improved QoQ (loss -12.7m -> -9.5m, ~+25% improvement). However, results remain unprofitable: latest net margin ~-8.8%. Margins improved slightly vs the prior quarter but have been highly volatile across the period.
Cash Flow Quality
Free cash flow deteriorated QoQ: +$16.3m to -$8.0m. Dividend payments continued (~$2.35m), but the lack of consistent FCF coverage in the latest quarter is a caution flag.
Leverage & Balance Sheet
Equity decreased QoQ (194.6m -> 186.7m) and assets declined (289.3m -> 274.1m), but the company remains liquid with net cash (netDebt -$58.4m). No major leverage stress is evident from net debt.
Shareholder Returns
Stock price performance is weak: -29.4% over 1 year. Dividend yield is modest (~1.9%), so total shareholder return likely remains negative; no buyback data provided.
Analyst Sentiment & Valuation
Consensus price target is $13 vs. price $3.85, implying substantial indicated upside. That said, valuation upside contrasts with recent cash flow volatility and continued losses, warranting a middle-high score rather than a top score.
Disclaimer:This analysis is AI-generated for informational purposes only. Accuracy is not guaranteed and this does not constitute financial advice.
RGP delivered Q3 results largely within its previously provided outlook, with a key positive: gross margin rose 60 bps to 35.7% and run-rate SG&A improved 10% YoY as cost actions (including an additional January reduction in force) lowered management compensation and controlled opex. Segment profitability diverged sharply—On-Demand Talent margin expanded by ~150 bps to 7.0% on better bill rates and disciplined headcount, while Consulting margin compressed by ~660 bps to 4.6% as utilization remained pressured and integration effects are still pending. Management expects integration completion by May and new leadership to improve utilization/conversion through fiscal 2027, with hire maturation modeled around 6-9 months and revenue growth expected to show up in the latter half (especially latter two quarters) of FY27. Q4 guidance (revenue $104M-$109M; gross margin 36.5%-37.5%) implies continued YoY decline. Capital remains flexible (no debt; $82.8M cash; $79M buyback availability). AI is framed as a tailwind overall, but operational accounting demand is steady-state lower.
Growth Catalysts
- On-demand talent sales leadership additions: new sales team leadership in Central U.S. and Northeastern U.S.; planned additions in Southeastern U.S. and Mexico
- On-demand talent skills expansion into ERP, finance transformation, data, supply chain and AI
- Consulting integration completed by end of fiscal year (May); unified Consulting segment led by Scott Rottmann to drive more consistent conversion/utilization in fiscal 2027
- Executive onboarding/AI capability buildout via Chief AI Officer Jessica Block to expand AI usage in client processes
- Pipeline maturation of new hires: management expects 6-9 month maturation, with growth expected to be more evident in the latter two quarters of fiscal 2027
Business Development
- Signed a binding agreement to dispose of the Sitrick crisis communications business
- Client win/demand context referenced broadly (no named new clients) and multinational/offshoring demand in Europe & Asia Pacific referenced generally
- Global delivery center outsourcing demand referenced as resonating with multinational clients (no names)
Financial Highlights
- Revenue: $107.9M, down 19.6% on same-day constant currency vs prior year (no M&A revenue in the quarter)
- Gross margin: 35.7%, up 60 bps vs 35.1% prior year quarter
- Run-rate SG&A: $39.4M, down 10% vs $43.7M prior year quarter (structural headcount reductions; partial impact of Jan 26 action; disciplined travel/occupancy/pro services)
- On-Demand Talent: revenue $40.9M (-16.3% YoY); segment adjusted EBITDA margin improved to 7.0% from 5.5% (+150 bps) driven by higher average bill rate, lower headcount and cost discipline
- Consulting: revenue $36.9M (-32.5% YoY); segment adjusted EBITDA margin declined to 4.6% from 11.2% (-660 bps) due to utilization pressure; expected improvement after integration completion and leadership onboarding into fiscal 2027
- Europe & Asia Pacific: revenue $18.1M (-5.8% YoY CC same-day); segment adjusted EBITDA margin 4.3% vs 4.5% prior year
- Outsourced Services: revenue $9.5M (-1.7% YoY same-day); segment adjusted EBITDA margin 15.1% vs 15.9% prior year
- Adjusted EBITDA: negative $1.4M
- Pay-to-bill ratio modest enhancement; favorable consultant benefit costs from lower health care expenses and fewer holidays
- Average bill rates (constant currency): Enterprise $120 vs $123 (-$3); On-demand $146 vs $140 (+$6); Consulting $162 vs $159 (+$3); E&AP $57 vs $59 (-$2)
Capital Funding
- Cash & cash equivalents: $82.8M at quarter end
- Debt: none outstanding (no outstanding debt)
- Credit facility: available borrowing capacity referenced as supporting balanced capital allocation
- Share repurchase program: $79M remained available under the program at quarter end
- Dividend: $2.3M paid in the quarter; 7.4% annualized yield based on end-of-quarter stock price
- Buyback timing: management indicated they will begin executing on buybacks when ready (no dollar authorization stated beyond remaining $79M availability)
Strategy & Ops
- Organization-wide simplification/cost alignment: additional reduction in force in January (with prior actions; annualized cost savings target $12M-$14M)
- Planned selective reinvestment of cost savings into key leadership roles, revenue-producing capacity, and client-facing capabilities (reinvestments begin impacting SG&A in Q3 and full impact expected over next couple of quarters; potential SG&A elevation starting Q1 fiscal 2027)
- Integration of legacy consulting units into one Consulting segment led by Scott Rottmann; integration completion by end of fiscal year in May
- Leadership hires: Jessica Block (Chief AI Officer), Prashant Lamba (Chief Information Officer) to accelerate AI capability and operational simplification via intelligent automation
- Sales execution actions: expansion of sales capacity across North America with new sales team professionals
Market Outlook
- Q4 2026 revenue guidance: $104M to $109M
- Q4 gross margin guidance: 36.5% to 37.5%
- Q4 run-rate SG&A guidance: $39M to $41M (includes further realization of January cost savings, offset by reinvestments)
- Q4 business days (U.S.): 64 days vs 69 prior year Q4 and 61 days in Q3
- Q4 revenue rate framing (organic constant currency same-day): top of range implies ~16% YoY decline (per CFO response)
- Fiscal 2027 top-line growth expectation: growth over fiscal 2026 when fiscal 2027 wraps up; growth expected to be more prevalent in the latter half of fiscal 2027
Risks & Headwinds
- Longer sales cycles in Consulting continue to weigh on top-line results; utilization pressure in Consulting contributed to margin decline (-660 bps)
- Client decision-making remains deliberate for larger/complex work; uptick in closed contracts volume has not yet translated into revenue growth
- Some reduced demand in traditional finance roles due to AI/automation (operational accounting roles cited); described as steady-state with no acceleration
- Q4 weekly trends tracking below Q3 levels
- Macro/geopolitical uncertainty: management noted it is too early to assess whether the Iran conflict will affect client attitudes/plans
Sentiment: MIXED
Note: This summary was synthesized by AI from the RGP Q3 2026 (ended Feb 28, 2026) earnings transcript. Financial data is complex; please verify all metrics against official SEC filings before making investment decisions.