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Resources Connection
(NASDAQ:RGP)
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Rating:47Neutral
Price Target:
$3.00
▼(-29.58% Downside)
Action:Reiterated
Date:10/09/26
The score is held down primarily by deteriorated financial performance (losses and negative free cash flow) and bearish technicals (price below all key moving averages with negative momentum). Partially offsetting these are the very high dividend yield and an earnings-call narrative that suggests stabilization efforts are underway, although near-term guidance remains flat and profitability is still pressured.
Positive Factors
Conservative balance sheet
Low leverage and meaningful cash reserves provide financial flexibility while the company works through weaker demand. This cushion can support operating needs, selective investment, and restructuring without relying heavily on additional borrowing over the next several quarters.
Negative Factors
Revenue and profitability deterioration
The shift from prior-year profitability to substantial operating and net losses shows that lower revenue is currently overwhelming the company’s cost structure. Persistent earnings pressure could reduce reinvestment capacity and weaken the durability of returns until volume recovers.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Low leverage and meaningful cash reserves provide financial flexibility while the company works through weaker demand. This cushion can support operating needs, selective investment, and restructuring without relying heavily on additional borrowing over the next several quarters.
Read all positive factors
Resources Connection Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how revenue is distributed across different business segments, highlighting which areas are driving growth and which may need strategic adjustments.
Shows how revenue is distributed across different business segments, highlighting which areas are driving growth and which may need strategic adjustments.
Data provided by:
The Fly
The FlyResources Connection (RGP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$98.20M
Dividend Yield9.89%
Average Volume (3M)408.39K
Price to Earnings (P/E)―
Beta (1Y)1.33
Revenue Growth-19.60%
EPS Growth76.21%
CountryUS
Employees601
SectorIndustrials
Sector Strength72
IndustryConsulting Services
Share Statistics
EPS (TTM)-1.36
Shares Outstanding34,701,300
10 Day Avg. Volume561,929
30 Day Avg. Volume408,395
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)0.89
Price to Sales (P/S)0.34
P/FCF Ratio244.99
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue0.25
Enterprise Value/Gross Profit0.68
Enterprise Value/Ebitda-3.11
Forecast
1Y Price Target
$6.00Price Target Upside40.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)-0.53
Revenue Forecast (FY)$405.46M
Resources Connection Business Overview & Revenue Model
Company Description
Resources Connection, Inc. engages in the provision of consulting services to business customers under the Resources Global Professionals (RGP) name in North America, the Asia Pacific, and Europe. The company operates through On-Demand Talent, Con...
How the Company Makes Money
RGP primarily makes money by delivering professional services to clients on a time-and-materials and/or project basis. The core revenue stream is fees billed for its consultants’ and practitioners’ labor (typically priced by hourly or daily rates)...
Resources Connection Earnings Call Summary
Earnings Call Date:Oct 07, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Jan 06, 2027
Earnings Call Sentiment Negative
The call reflected significant ongoing financial and operating challenges, including an 18.5% year-over-year revenue decline, weaker segment profitability, low consulting utilization, delayed project starts and a second-quarter outlook broadly consistent with depressed first-quarter levels. These lowlights outweighed positive developments such as strategic-account growth, pipeline creation, pricing discipline, cost reductions, liquidity strength and management's view that activity may be stabilizing.Positive Updates
Quarterly Results Met Revenue and Gross Margin Outlook
First-quarter revenue was $98.1 million and gross margin was 37.4%, both within the outlook ranges provided in July. Run rate SG&A expense was $40.3 million, better than the outlook.
Negative Updates
Revenue Declined 18.5% Year-over-Year
Consolidated revenue was $98.1 million, representing an 18.5% decline on a same-day constant currency basis compared with the prior-year quarter. Management stated that revenue and profitability remain below RGP's long-run potential.
Read all updates
Q1-2027 Updates
Positive
Negative
Quarterly Results Met Revenue and Gross Margin Outlook
First-quarter revenue was $98.1 million and gross margin was 37.4%, both within the outlook ranges provided in July. Run rate SG&A expense was $40.3 million, better than the outlook.
Read all positive updates
Company Guidance
For the second quarter of fiscal 2027, RGP expects revenue to be broadly consistent with first quarter levels, ranging from $95 million to $100 million, gross margin to be between 36% and 37%, run rate SG&A expense to be in the range of $40 million to $42 million, and non-run rate and noncash expenses to range from $2 million to $3 million; management said it thinks things are stabilizing, that it is bottoming out in terms of activity, and that it will be experiencing some sequential growth as it looks forward, while salaried consultant utilization was similar, slightly lower sort of high 50s.Resources Connection Financial Statement Overview
Summary
Income Statement
23
Negative
Balance Sheet
66
Positive
Cash Flow
28
Negative
| Breakdown | TTM | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 429.86M | 452.01M | 551.33M | 632.80M | 775.64M | 805.02M |
| Gross Profit | 158.88M | 169.68M | 207.42M | 246.07M | 313.14M | 316.64M |
| EBITDA | -34.76M | -27.93M | 10.50M | 41.30M | 84.70M | 92.52M |
| Net Income | -46.17M | -40.60M | -191.78M | 21.03M | 54.36M | 67.17M |
Balance Sheet | ||||||
| Total Assets | 231.90M | 257.40M | 304.69M | 510.91M | 532.00M | 581.47M |
| Cash, Cash Equivalents and Short-Term Investments | 61.23M | 82.37M | 86.15M | 108.89M | 116.78M | 104.22M |
| Total Debt | 22.50M | 22.52M | 25.30M | 13.32M | 17.73M | 75.55M |
| Total Liabilities | 70.62M | 87.63M | 97.61M | 92.15M | 117.48M | 209.02M |
| Stockholders Equity | 161.28M | 169.77M | 207.08M | 418.76M | 414.52M | 372.45M |
Cash Flow | ||||||
| Free Cash Flow | -10.88M | 619.00K | 16.19M | 20.78M | 79.62M | 46.48M |
| Operating Cash Flow | -9.60M | 1.43M | 18.90M | 21.92M | 81.64M | 49.44M |
| Investing Cash Flow | 929.00K | 1.08M | -13.57M | -8.55M | 3.94M | -2.96M |
| Financing Cash Flow | -8.20M | -7.53M | -27.73M | -20.71M | -71.91M | -13.37M |
Resources Connection Technical Analysis
Negative
4.26
Price Trends
4.02
Negative
4.18
Negative
4.08
Negative
Market Momentum
-0.21
Positive
20.16
Positive
17.36
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGP, the sentiment is Negative. The current price of 4.26 is above the 20-day moving average (MA) of 3.79, above the 50-day MA of 4.02, and above the 200-day MA of 4.08, indicating a bearish trend. The MACD of -0.21 indicates Positive momentum. The RSI at 20.16 is Positive, neither overbought nor oversold. The STOCH value of 17.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RGP.
Resources Connection Risk Analysis
Resources Connection disclosed 32 risk factors in its most recent earnings report. Resources Connection reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Resources Connection Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $2.66B | 24.49 | 25.53% | ― | 13.60% | 14.77% | |
74 Outperform | $1.57B | 18.01 | 8.57% | 0.64% | -7.89% | -16.13% | |
72 Outperform | $3.76B | 16.63 | 15.61% | ― | 7.12% | 15.93% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
57 Neutral | $204.98M | 100.83 | 4.33% | ― | -6.14% | -78.29% | |
53 Neutral | $216.85M | -5.08 | -33.27% | 1.84% | -7.54% | 52.04% | |
47 Neutral | $98.20M | -2.08 | -25.92% | 9.89% | -19.60% | 76.21% |
* Industrials Sector Average
RGP
Resources Connection
2.83
-1.20
-29.76%
FORR
Forrester Research
11.39
2.76
31.98%
FC
Franklin Covey Company
18.15
0.58
3.30%
FCN
FTI Consulting
136.16
-21.44
-13.60%
HURN
Huron Consulting
167.05
19.32
13.08%
ICFI
Icf International
87.55
1.34
1.55%
Resources Connection Corporate Events
Executive/Board Changes
Resources Connection Strengthens Finance Team Amid Leadership Transition
Positive
Sep 21, 2026
Resources Connection, Inc. announced that its Board of Directors appointed Trisha Jenks as Chief Accounting Officer and principal accounting officer on September 17, 2026, with the role effective October 3, 2026. This change follows the previously...
Business Operations and StrategyExecutive/Board Changes
Resources Connection Names Chief AI Officer Interim CFO
Neutral
Sep 3, 2026
On September 1, 2026, RGP’s Chief Financial Officer Jennifer Y. Ryu submitted her resignation, effective October 2, 2026, prompting the company to launch a search for a permanent successor. To maintain financial leadership continuity, RGP an...
Dividends
Resources Connection Announces Quarterly Cash Dividend Policy
Positive
Aug 11, 2026
On August 6, 2026, Resources Connection, Inc.’s board of directors approved a cash dividend of $0.07 per share on the company’s common stock, reinforcing its capital-return policy to shareholders. The dividend will be paid on October 1...
Business Operations and StrategyExecutive/Board ChangesPrivate Placements and Financing
Resources Connection Secures New Revolving Credit Facility
Positive
Jul 17, 2026
On July 15, 2026, Resources Connection entered into a new secured revolving credit facility with PNC Bank and other lenders, providing up to $30 million in borrowing capacity, with an uncommitted option to increase by an additional $20 million bef...
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.