RESOURCES CONNECTION, INC. (RGP) - Comprehensive Stock Analysis & Investment Research
Deep dive into RESOURCES CONNECTION, INC.'s business profile, financial performance, AI predictions, and competitive positioning to make informed investment decisions.
RESOURCES CONNECTION, INC. Investment Summary
When evaluating whether RESOURCES CONNECTION, INC. (RGP) represents a compelling investment opportunity, investors must consider multiple factors including the company's financial health, market position, growth prospects, and what our AI-powered predictive models suggest about its near-term price trajectory.
Company Profile
RESOURCES CONNECTION, INC. (RGP) operates within the Trade & Services sector, specifically in the Services-Business Services, NEC industry. The company employs approximately 4,933 people. With a market capitalization of $176 million, the company is a small-cap stock that may offer higher growth potential but also carries higher volatility.
Financial Performance Analysis
RESOURCES CONNECTION, INC. generates annual revenues of approximately $534 million. The company operates with a net margin of 9.2%, showing modest profitability.
From a profitability standpoint, the company delivers an outstanding Return on Equity (ROE) of 21.0%, demonstrating excellent shareholder value creation and management effectiveness. The Return on Assets (ROA) stands at 13.2%, indicating efficient asset utilization. The gross margin of 38.8% indicates healthy product or service economics.
Balance Sheet Strength
Examining the balance sheet health, the current ratio of 2.40x indicates excellent short-term liquidity, meaning the company can comfortably cover its near-term obligations. The debt-to-equity ratio of 0.19x reflects a conservative capital structure with low leverage.
Cash Flow Generation
RESOURCES CONNECTION, INC. generates $24 million in annual free cash flow, providing financial flexibility for dividends, share buybacks, debt reduction, or strategic investments. Operating cash flow stands at $27 million, demonstrating the company's ability to generate cash from its core business operations. Year-over-year operating cash flow has changed by -19.3%, which merits investor attention.
Valuation Analysis
The P/E ratio of 22.9x represents a reasonable valuation that balances current earnings with growth expectations, falling within a typical range for established companies. The price-to-book ratio stands at 0.85x, potentially indicating undervaluation or market concerns about asset quality. For income-focused investors, the current dividend yield of 5.32% offers an attractive income stream, though sustainability should be verified against payout ratios.
AI-Powered Price Predictions
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Investment Considerations
When determining whether RESOURCES CONNECTION, INC. is a suitable investment, consider your investment objectives, risk tolerance, and time horizon. As a small-cap stock, RESOURCES CONNECTION, INC. may offer higher growth potential but also carries elevated volatility and risk.
This analysis is generated automatically using our proprietary AI systems and should not be considered personalized investment advice. Past performance does not guarantee future results. Always conduct your own research and consider consulting a financial advisor before making investment decisions.
Corporate Identity
RESOURCES CONNECTION, INC. (Stock Symbol: RGP) is a prominent company operating within the Trade & Services sector, with a specific focus on the Services-Business Services, NEC industry. The company's shares are publicly traded on the Nasdaq exchange.
Leadership & Workforce
The organization employs approximately 4,933 professionals, indicating a well-established company with meaningful operational scale and the human resources necessary to compete effectively in its markets.
Market Classification
With a market capitalization of $176 million, RESOURCES CONNECTION, INC. is classified as a small-cap stock. Small-cap companies often represent emerging businesses with substantial growth potential. While these investments typically carry higher volatility, they can offer significant upside for investors willing to accept greater risk.
Sector & Industry Context
Operating within the Trade & Services sector, RESOURCES CONNECTION, INC. is subject to the unique dynamics, opportunities, and challenges that characterize this segment of the economy.
Revenue & Growth Analysis
RESOURCES CONNECTION, INC. generates annual revenues of $534 million , representing an emerging company in its growth phase. While smaller in scale, such companies often offer higher growth potential as they capture market share and expand their operations.
Profitability Analysis
The company achieves a 9.2% net profit margin, indicating acceptable but modest profitability. This margin level is common in competitive industries or those with high operating costs. There may be opportunities for margin expansion through operational improvements or scale efficiencies.
Gross profit margin stands at 38.8%, a moderate margin common in manufacturing, retail, or distribution-heavy businesses where competition or cost structures limit pricing flexibility.
Operating margin is 9.3%, indicating moderate operational leverage where fixed costs consume a significant portion of gross profits.
Market Valuation
Current market capitalization stands at $176 million . This small-cap classification typically represents higher-growth, higher-risk opportunities. Small-cap stocks can be more volatile but may offer substantial returns if the company successfully executes its growth strategy.
Return on Investment Metrics
Return on Equity (ROE) measures 21.0%, showing strong ability to generate shareholder value from invested capital. This solid ROE suggests effective management and a business model that efficiently converts equity investments into profits.
Return on Assets (ROA) stands at 13.2%, demonstrating solid efficiency in utilizing company assets to generate earnings.
Return on Invested Capital (ROIC) measures 17.1%, demonstrating the company creates meaningful value by earning returns well above its cost of capital.
Cash Flow Generation
Free cash flow generation of $24 million annually indicates positive cash generation, though at a modest level that may limit flexibility for major investments or returns to shareholders.
Operating cash flow reaches $27 million , with year-over-year growth of -19.3%. Operating cash flow represents the cash generated from core business operations before capital investments, providing insight into the sustainability of the company's business model.
Strategic Market Position
RESOURCES CONNECTION, INC. strategically competes in the highly dynamic Services-Business Services, NEC marketplace. As a small-cap company, it represents an emerging market participant with potentially significant growth opportunities. Small-caps often offer greater growth potential as they capture market share and scale their operations, though this comes with higher risk and volatility. Success at this stage can lead to substantial returns for early investors who identify winning business models.
Industry Competitive Landscape
RESOURCES CONNECTION, INC. competes within the Trade & Services sector, navigating the competitive dynamics and market forces specific to this industry. The company's competitive position depends on its ability to differentiate through product quality, cost efficiency, customer relationships, or other strategic advantages relevant to its specific market segment.
Operational Efficiency
The company shows positive operational efficiency through free cash flow generation of $24 million annually , with year-over-year cash flow growth of -19.3%. Positive free cash flow indicates the business generates more cash than required for operations and capital investments, providing resources for growth initiatives or shareholder returns.
Margin & Pricing Power Analysis
The company maintains a 38.8% gross margin reflecting moderate pricing power typical of many manufacturing, retail, or service businesses. While not exceptionally high, these margins provide adequate room for operating expenses and profit generation. Competitive pressures or cost increases could impact profitability if margins compress.
Operating margin of 9.3% demonstrates how efficiently the company converts revenues into operating profits after accounting for all operating expenses including research and development, sales and marketing, and general administrative costs. Operating margin compression relative to gross margin suggests high operating expenses that may warrant efficiency improvements or reflect necessary growth investments.
Asset Utilization Efficiency
Asset turnover ratio of 1.43x indicates solid asset utilization efficiency appropriate for many manufacturing or mixed business models. This level suggests the company generates meaningful revenue from its asset base while maintaining necessary capital investments for operations.
Financial Strength & Leverage
Current ratio of 2.40 demonstrates strong short-term liquidity with current assets significantly exceeding current liabilities. This provides a substantial buffer for meeting near-term obligations and handling unexpected financial needs.