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1. Company Snapshot

1.a. Company Description

RCM Technologies, Inc.provides business and technology solutions in the United States, Canada, Puerto Rico, and Serbia.It operates through three segments: Engineering, Specialty Health Care, and Life Sciences and Information Technology.


The Engineering segment offers a range of engineering services, including project management engineering and design, engineering analysis, engineer-procure-construct, configuration management, hardware/software validation and verification, quality assurance, technical writing and publications, manufacturing process planning and improvement, and 3D/BIM integrated design.The Specialty Health Care segment provides long-term and short-term staffing, executive search, and placement services in the fields of allied and therapy staffing, correctional healthcare staffing, health information management, nursing services, physician and advanced practice, school services, and telepractice.The Life Sciences and Information Technology segment provides enterprise business solutions, application services, infrastructure solutions, competitive advantage, life sciences solutions, and other vertical market specific solutions.


The company serves aerospace and defense, energy, financial services, health care, life sciences, manufacturing and distribution, and technology industries, as well as educational institutions and the public sector.RCM Technologies, Inc.was founded in 1971 and is based in Pennsauken, New Jersey.

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1.b. Last Insights on RCMT

RCM Technologies, Inc.'s recent performance was negatively impacted by its Q3 earnings miss, with quarterly earnings of $0.42 per share, falling short of the Zacks Consensus Estimate of $0.45 per share. This compares to earnings of $0.44 per share a year ago. The company's financial results for the thirteen and thirty-nine weeks ended September 27, 2025, were announced on November 5, 2025. A closer look at the Q3 2025 earnings call transcript may provide further insights into the company's current challenges.

1.c. Company Highlights

2. RCM's Q3 2025 Earnings: Resilient Performance Amidst Challenges

RCM's financial results for Q3 2025 demonstrated resilience despite certain headwinds, with consolidated gross profit reaching $19.4 million, an 8.8% growth over Q3 2024. Adjusted EBITDA for the quarter was $5.5 million, a slight decline of 1.4% from the same period last year. The company's adjusted EPS stood at $0.42, in line with the previous year's quarter but slightly below analyst estimates of $0.45. The slow start to Q3 due to lower summer session revenue in healthcare was a notable challenge, but September gross profit for all healthcare grew over 20% compared to 2024, as highlighted by CFO Kevin Miller's discussion on the improving trend.

Publication Date: Nov -12

📋 Highlights
  • Record Engineering Backlog & Momentum:: RCM secured a record 2026 engineering backlog and reported healthcare growth, driven by brand awareness and employee commitment.
  • Financial Resilience:: Consolidated gross profit reached $19.4M in Q3 2025 (8.8% YoY growth), despite $1.8M excess medical costs year-to-date.
  • Life Sciences Expansion:: Partnered with an AI-driven validation company to streamline compliance, reducing turnaround times amid industry shifts from tariffs and pricing reforms.
  • Healthcare Recovery:: September 2025 healthcare gross profit rose >20% YoY, with October billable hours up 18% YoY, rebounding from a slow summer.
  • Talent & Market Position:: Attracting top candidates due to brand investments, with 18% YoY growth in highly qualified applicants and a focus on Tier 1 talent acquisition.

Operational Highlights

RCM's operating performance during the quarter was marked by a record 2026 engineering backlog and continued momentum in healthcare, driven by growing brand awareness and employees' commitment to quality and reliable delivery. The company has seen a noticeable change in the number of highly qualified candidates reaching out to RCM, providing further fuel for growth. This is a testament to the company's efforts in enhancing its brand and digital presence, which has helped attract new talent.

Business Unit Performance

RCM's Engineering Services delivered another strong quarter, securing a record backlog for 2026. The company's integrated engineering and EPC model continues to gain momentum as utilities and data center developers seek partners with technical depth, safety culture, and scalability. In Life Sciences, RCM is capitalizing on industry shifts by partnering with an AI-driven computer software validation and equipment qualification company, streamlining compliance protocols and reducing turnaround times.

Valuation and Growth Prospects

With a P/E Ratio of 11.4 and an EV/EBITDA of 7.23, the market seems to have priced in moderate growth expectations. Analysts estimate next year's revenue growth at 7.5%. RCM's stronghold in the utility market and its growing presence in data center activity are expected to drive future growth. The company's ROE of 35.58% and ROIC of 17.9% indicate a strong ability to generate returns on equity and invested capital. As RCM continues to invest in new schools and technologies, its prospects for sustained growth appear promising.

Financial Flexibility and Capital Allocation

RCM has a revolver in place, providing financial flexibility, and balances available debt with its buyback program to reduce shares outstanding and improve valuation. The company's net debt to EBITDA ratio stands at 1.41, indicating a manageable level of leverage. With a Free Cash Flow Yield of 9.37%, RCM appears to be generating significant cash flows relative to its market value.

3. NewsRoom

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Everyday People Financial Reports Record Revenue Growth of 51% in RCM Segment and Expands AnyDay Tip Payments Program

Nov -14

Source: newsfilecorp.com

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RCM Technologies, Inc. (RCMT) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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RCM Technologies, Inc. (RCMT) Q3 Earnings Miss Estimates

Nov -06

Source: zacks.com

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RCM Technologies, Inc. Announces Third Quarter Results

Nov -05

Source: globenewswire.com

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RCM Technologies, Inc. (RCMT) Sees a More Significant Dip Than Broader Market: Some Facts to Know

Oct -09

Source: zacks.com

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RCM Technologies, Inc. (RCMT) Stock Dips While Market Gains: Key Facts

Oct -02

Source: zacks.com

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RCM Technologies, Inc. (RCMT) Exceeds Market Returns: Some Facts to Consider

Sep -26

Source: zacks.com

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RCM Technologies, Inc. (RCMT) Rises Higher Than Market: Key Facts

Sep -18

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.71%)

6. Segments

Specialty Health Care

Expected Growth: 5.5%

RCM Technologies' Specialty Health Care segment growth of 5.5% is driven by increasing demand for healthcare services, aging population, and healthcare reform. Additionally, the company's expertise in revenue cycle management, strategic acquisitions, and expansion into new markets contribute to its growth.

Engineering

Expected Growth: 5.8%

RCM Technologies' Engineering segment growth of 5.8% is driven by increasing demand for digital transformation, IoT, and Industry 4.0 solutions. Strong project execution, strategic acquisitions, and a skilled workforce have enabled the company to capitalize on these trends. Additionally, growing investments in infrastructure development and renewable energy have contributed to the segment's growth.

Life Sciences and Information Technology

Expected Growth: 6.2%

RCM Technologies, Inc.'s 6.2% growth in Life Sciences is driven by increasing demand for clinical trials, regulatory compliance, and personalized medicine. In Information Technology, growth is fueled by digital transformation, cloud adoption, and cybersecurity needs. These drivers are amplified by the company's expertise in providing specialized talent and project-based solutions to clients in these sectors.

7. Detailed Products

Engineering Services

RCM Technologies provides engineering services that include design, development, testing, and deployment of engineering solutions for various industries.

Information Technology Services

RCM offers IT services that include software development, data analytics, cybersecurity, and IT consulting to help businesses optimize their IT infrastructure.

Specialized Health Services

RCM provides specialized health services, including medical consulting, case management, and vocational rehabilitation, to help individuals with injuries or illnesses.

Environmental Services

RCM offers environmental services, including environmental consulting, remediation, and compliance, to help businesses manage environmental risks and liabilities.

IT Consulting Services

RCM's IT consulting services help businesses evaluate, select, and implement technology solutions that meet their specific needs and goals.

8. RCM Technologies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for RCM Technologies, Inc. is medium due to the presence of alternative IT consulting services and staffing firms.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of large clients and the availability of alternative service providers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is medium due to the moderate barriers to entry and the availability of resources for new entrants.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple competitors and the need to differentiate services to attract and retain clients.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 55.16%
Debt Cost 5.43%
Equity Weight 44.84%
Equity Cost 7.84%
WACC 6.51%
Leverage 123.03%

11. Quality Control: RCM Technologies, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Steel Partners

A-Score: 6.1/10

Value: 9.3

Growth: 8.8

Quality: 7.2

Yield: 0.0

Momentum: 6.0

Volatility: 5.3

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RCM Technologies

A-Score: 5.5/10

Value: 5.1

Growth: 8.4

Quality: 5.3

Yield: 0.0

Momentum: 9.0

Volatility: 5.0

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A-Score: 4.5/10

Value: 7.8

Growth: 2.9

Quality: 3.6

Yield: 0.0

Momentum: 4.0

Volatility: 8.7

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Compass Diversified

A-Score: 4.4/10

Value: 7.4

Growth: 2.3

Quality: 4.5

Yield: 10.0

Momentum: 0.0

Volatility: 2.0

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FTAI Infrastructure

A-Score: 3.5/10

Value: 7.2

Growth: 4.2

Quality: 2.4

Yield: 4.0

Momentum: 1.0

Volatility: 2.3

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NN

A-Score: 2.4/10

Value: 7.7

Growth: 1.6

Quality: 2.1

Yield: 0.0

Momentum: 1.0

Volatility: 2.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.07$

Current Price

20.07$

Potential

-0.00%

Expected Cash-Flows