One-glance verdict
Undervalued
$24.73 our estimate vs market $4.49
Wall Street consensus: $5.50 (-77.8% lower than our fair-value estimate)
82% below our estimate, below the bear case
Fundamentals snapshot
Resources Connection, Inc.
RGP · NMS · Industrials · Consulting Services
Current price
$4.49
52-week range
$3.06 - $6.30
Market cap
$154.14M
Balance sheet
Healthy
4.99x Stretched
Net cash $58.41M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Free cash flow was positive in 10/10 years.
- Reward Dividend yield is 6.2% with 20-year payout history.
- Risk Return on equity was -42.1% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from 10.4% to -3.4% over 3 years.
What this company does
Resources Connection, Inc.
Resources Connection (RGP) is like a temp agency for highly skilled professionals, providing businesses with experts in areas like finance, technology, and crisis communication for specific projects. The company makes money by charging fees for placing these consultants, with most of its revenue (the total money it brings in from sales) coming from its on-demand talent services. This business model is important because companies often need specialized help for short-term needs without the cost of a full-time hire, creating a market for RGP's services.
How the company got here
Resources Connection, Inc., which operates as RGP, was started in 1996 as a part of the major accounting firm Deloitte. It was created to provide experienced finance and accounting professionals to companies for specific projects, like helping with a merger or setting up new accounting systems. In 1999, the company's managers bought it from Deloitte to avoid rules that could limit their business. It became a publicly traded company in 2000, and since then has expanded into other areas like technology and human resources, and now operates in North America, Europe, and the Asia Pacific region.
What it actually does
Think of RGP as a company that provides businesses with experienced professionals on a temporary or project basis. If a company has a complex problem, like needing to improve its financial processes or manage a big technology upgrade, but doesn't want to hire a full-time employee, it can hire an expert or a team from RGP to help. RGP's clients are typically large and medium-sized businesses that need specialized skills for a set period to handle challenges in areas like finance, technology, and human resources. They make money by charging clients for the hours their consultants work or for the completion of a specific project.
On-Demand Talent
This is the original and core part of RGP's business, where they provide companies with skilled professionals to fill a specific need for a limited time. For example, if a company's finance manager goes on a long leave, they can get an experienced person from RGP to step in temporarily. This segment focuses heavily on providing experts for the office of the Chief Financial Officer (CFO), helping with accounting, financial reporting, and risk management. This is a major part of RGP's business and builds strong relationships with clients.
Consulting
This segment handles larger, more complex projects that aim to transform a part of a client's business. Instead of just filling a temporary role, RGP's consulting teams work on projects like implementing new technology systems, improving a company's supply chain (the process of getting products from the supplier to the customer), or ensuring the company is following financial regulations. This area is a key focus for RGP's growth, as these projects are often more valuable and build deeper client relationships.
Outsourced Services
Operating under the brand name Countsy, this part of the business offers to take over entire functions for other companies, particularly startups and growing businesses. For instance, a new tech company might not have its own finance or human resources department, so it can pay Countsy to handle all of its accounting, payroll, and HR needs. This provides a steady, recurring stream of income for RGP.
Sitrick
This segment was a specialized public relations and crisis communications firm. If a company faced a major public issue, like a product recall or a financial scandal, Sitrick would be hired to manage the company's communication and protect its reputation. However, as part of a plan to simplify its business, RGP recently announced that it is selling the Sitrick business.
What management is betting on now
RGP's management is currently focused on a few key areas to grow the business. They are working to expand their higher-value consulting services, especially in digital and technology transformation, to get involved in bigger and more complex projects. The company is also focused on aligning its costs with its current revenue (the money it brings in) and simplifying how it operates to become more efficient. Another priority is to adapt their on-demand talent business to meet changing client needs, especially as more companies adopt artificial intelligence (AI) and automation.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$3.04M
FY2025 Q1
$-575.00K
FY2025 Q2
$61.00K
FY2025 Q3
$238.00K
FY2025 Q4
$16.46M
FY2026 Q1
$-7.95M
FY2026 Q2
$15.57M
FY2026 Q3
$-8.83M
Revenue
$107.93M
Net income
$-9.47M
Diluted EPS
-0.28
Operating cash flow
$-8.72M
Free cash flow
$-8.83M
Fetching…
Sources
Revenue
$117.73M
Net income
$-12.66M
Diluted EPS
-0.38
Operating cash flow
$15.89M
Free cash flow
$15.57M
Fetching…
Sources
Revenue
$120.23M
Net income
$-2.40M
Diluted EPS
-0.07
Operating cash flow
$-7.83M
Free cash flow
$-7.95M
Fetching…
Sources
Revenue
$139.34M
Net income
$-73.31M
Diluted EPS
-2.21
Operating cash flow
$16.75M
Free cash flow
$16.46M
Fetching…
Sources
Revenue
$129.44M
Net income
$-44.05M
Diluted EPS
-1.34
Operating cash flow
$659.00K
Free cash flow
$238.00K
Fetching…
Sources
Revenue
$145.62M
Net income
$-68.72M
Diluted EPS
-2.08
Operating cash flow
$1.80M
Free cash flow
$61.00K
Fetching…
Sources
Revenue
$136.94M
Net income
$-5.71M
Diluted EPS
-0.17
Operating cash flow
$-309.00K
Free cash flow
$-575.00K
Fetching…
Sources
Revenue
$148.20M
Net income
$10.47M
Diluted EPS
0.31
Operating cash flow
$3.17M
Free cash flow
$3.04M
Fetching…
Sources
Is it cheap or expensive?
Fair value $24.73 vs current price $4.49
Wall Street consensus is the average analyst price target: $5.50 (-77.8% lower than our fair-value estimate).
Our most-likely fair value is $24.73 a share — about 450.8% above today's price of $4.49, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $58.4M - more cash than debt. Interest coverage 5.0x.
Net debt
$-58.41M
Interest coverage
4.99x
Resources Connection, Inc.'s profit covers its interest bill about 5.0 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
RGP
BASELINE
Resources Connection, Inc.
Total debt $24.36M Interest coverage 4.99x This is the baseline the peer rows are being compared against.
Total debt $62.34M Interest coverage 0.73x -85% vs RGP Carries about 6.9x less debt cushion than RGP.
Total debt $67.78M Interest coverage 4.38x -12% vs RGP Has roughly the same debt cushion as RGP.
Total debt $81.11M Interest coverage 15.53x +211% vs RGP Carries about 3.1x more debt cushion than RGP.
Total debt $835.00K Interest coverage 21.99x +341% vs RGP Carries about 4.4x more debt cushion than RGP.
Total debt $280.13M Interest coverage 15.51x +211% vs RGP Carries about 3.1x more debt cushion than RGP.
What you should know
The case for and against RGP
2 Rewards
3 Risks
Rewards
-
Free cash flow was positive in 10/10 years.
-
Dividend yield is 6.2% with 20-year payout history.
Risks
-
Return on equity was -42.1% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 10.4% to -3.4% over 3 years.
-
Insider ownership is only 10.4% (peer median: 18.7%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
-449.00x
P/B
0.82x
P/S
0.32x
EV/EBITDA
14.00x
PEG ratio
0.19x
Profitability
How much profit each dollar creates
Gross margin
38.3%
Operating margin
-3.4%
Net margin
-20.2%
ROE
-42.1%
ROA
0.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.13x
Current ratio
2.74x
Quick ratio
2.57x
Total debt
$24.36M
Total cash
$82.76M
Growth
How the business has been compounding
Revenue TTM
$485.23M
Revenue 5Y CAGR
-3.3%
EPS TTM
-2.96
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$16.08M
Free CF TTM
$16.19M
FCF margin
3.3%
Dividend
Shareholder payout
Yield
6.2%
Payout ratio
155.6%
Last ex-div date
2026-05-21