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1. Company Snapshot

1.a. Company Description

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.

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1.b. Last Insights on RGP

The recent 3-month performance of Resources Connection, Inc. was negatively impacted by a decline in revenue, with a 14.5% drop to $129.4 million compared to the prior year quarter. Same-day constant currency revenue also declined by 11.2%, indicating a weakening demand for the company's professional services. Furthermore, the gross margin contracted to 35.1% from 37.0%, suggesting a decrease in pricing power.

1.c. Company Highlights

2. Resources Connection Delivers Better-Than-Expected Q1 Results

Resources Connection, Inc. (RGP) reported revenue of $120.2 million, gross margin of 39.5%, and earnings per share (EPS) of $0.03, beating expectations. The EPS figure was significantly better than the estimated loss of $0.15. Revenue was above the company's outlook range, driven by stronger cross-practice collaboration and continued focus on value-based pricing within consulting. The gross margin was also significantly better than expected, driven by disciplined cost management and a diversified services model.

Publication Date: Nov -04

📋 Highlights
  • Revenue & Margin Outperformance: Q1 revenue $120.2M vs. outlook range, gross margin 39.5% vs. expectations.
  • Regional Growth: Europe/Asia Pac grew 5%, Japan/India delivered growth; West Coast/Southeast demand consistent.
  • EBITDA Improvement: Adjusted EBITDA $3.1M (2.5% margin), driven by Consulting ($5M EBITDA, 11.6% margin) despite revenue declines.
  • Bill Rate Increase: Average bill rate rose to $120 (up from $118 YoY), with 11% consulting bill rate growth ($144 to $160).
  • SG&A Efficiency: SG&A $44.5M (7% YoY decline), $6–8M annual cost savings from organizational streamlining.

Segment Performance

The On-Demand segment revenue was $44.4 million, a decline of 16% versus the prior year, but segment adjusted EBITDA improved to $4.4 million or a 10% margin. The Consulting segment revenue was $43.6 million, a decline of 22% from the prior year, but first-quarter segment adjusted EBITDA was $5 million or an 11.6% margin. The company's diversified model is scalable, allowing clients to flex the team up or down depending on project demand.

Operational Highlights

The company's focus on CFO advisory and digital transformation is driving growth, with a sweet spot in high-demand areas such as finance transformation, AI, and data, risk and compliance, transaction integration, supply chain optimization, digital and cloud transformation. Enterprise-wide average bill rate increased to $120 in constant currency from $118 a year ago, driven by an 11% improvement in average bill rate in consulting from $144 to $160.

Valuation and Outlook

With a P/S Ratio of 0.29 and EV/EBITDA of 9.35, the stock appears to be reasonably valued. The company's liquidity remains strong, with $77.5 million of cash and cash equivalents and no outstanding debt. The second-quarter outlook calls for revenue of $115 million to $120 million, gross margin of 38% to 39%, and run-rate SG&A expense of $43 million to $45 million. Analysts estimate next year's revenue growth at -9.9%, but the company's diversified portfolio, strong client relationships, and winning strategy position RGP for sustained long-term growth and profitability.

Regional and Service Line Trends

The company is seeing consistent demand across its core offerings, with a strong presence in the West Coast and Southeast. The company is also seeing growth in CFO advisory and digital transformation, with a focus on high-value roles such as ERP, data, and supply chain. Europe and Asia Pac achieved 5% growth, while Japan and India delivered growth in Q1.

3. NewsRoom

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Resources Connection, Inc. Announces CEO Transition

Nov -03

Source: businesswire.com

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Resources Connection, Inc. Announces Quarterly Dividend and Dividend Payment Date

Oct -20

Source: businesswire.com

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Resources Connection: Maintaining Hold Rating Although Q1 Earnings Encouraging

Oct -09

Source: seekingalpha.com

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Resources Connection, Inc. (RGP) Q1 2026 Earnings Call Transcript

Oct -09

Source: seekingalpha.com

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Resources Connection (RGP) Q1 Earnings and Revenues Top Estimates

Oct -08

Source: zacks.com

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Resources Connection Reports Financial Results for First Quarter Fiscal 2026

Oct -08

Source: businesswire.com

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RGP Launches rIQ, Proprietary AI Accelerator Built on ServiceNow

Sep -30

Source: businesswire.com

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Resources Connection to Announce First Quarter Fiscal 2026 Results on October 8, 2025

Sep -24

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.97%)

6. Segments

Resources Global Professionals

Expected Growth: 4.0%

Resources Global Professionals' 4.0 growth driven by increasing demand for consulting services, expansion into new markets, and strategic acquisitions. Strong relationships with Fortune 500 clients, expertise in finance, risk, and internal audit, and a scalable business model also contribute to growth.

Other

Expected Growth: 2.0%

Resources Connection's 2.0% growth in 'Other' segment is driven by increasing demand for consulting services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on digital transformation and innovation has led to higher revenue from its proprietary tools and platforms. These factors have contributed to the segment's steady growth, despite intense competition in the consulting industry.

7. Detailed Products

Finance and Accounting

Resources Connection provides financial planning, accounting, and financial reporting services to help clients manage their financial resources effectively.

Human Capital

Resources Connection offers human capital services, including HR consulting, talent management, and benefits administration to help clients manage their workforce effectively.

Information Management

Resources Connection provides information management services, including data analytics, business intelligence, and IT consulting to help clients make informed business decisions.

Legal

Resources Connection offers legal services, including contract management, legal operations, and litigation support to help clients manage their legal functions efficiently.

Supply Chain Management

Resources Connection provides supply chain management services, including procurement, logistics, and operations consulting to help clients optimize their supply chain operations.

Risk and Compliance

Resources Connection offers risk and compliance services, including internal audit, risk management, and compliance consulting to help clients manage risk and ensure regulatory compliance.

8. Resources Connection, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Resources Connection, Inc. operates in a niche market, providing specialized professional services. While there are substitutes available, they are not as comprehensive as the services offered by Resources Connection, Inc. Therefore, the threat of substitutes is medium.

Bargaining Power Of Customers

Resources Connection, Inc. has a diverse customer base, and no single customer accounts for a significant portion of its revenue. This reduces the bargaining power of customers, making it low.

Bargaining Power Of Suppliers

Resources Connection, Inc. relies on a network of independent contractors and consultants to deliver its services. While it has some bargaining power, the availability of skilled professionals in the market limits its negotiating power, making it medium.

Threat Of New Entrants

The professional services industry has high barriers to entry, including the need for specialized skills and expertise. This makes it difficult for new entrants to compete with established players like Resources Connection, Inc., making the threat of new entrants low.

Intensity Of Rivalry

The professional services industry is highly competitive, with many established players competing for market share. Resources Connection, Inc. faces intense competition from rivals, making the intensity of rivalry high.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.10%
Debt Cost 4.16%
Equity Weight 95.90%
Equity Cost 7.20%
WACC 7.08%
Leverage 4.28%

11. Quality Control: Resources Connection, Inc. passed 7 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

Stock-Card
Ennis

A-Score: 6.7/10

Value: 7.2

Growth: 4.1

Quality: 7.2

Yield: 10.0

Momentum: 2.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
REV Group

A-Score: 5.8/10

Value: 4.1

Growth: 6.2

Quality: 6.3

Yield: 4.0

Momentum: 10.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Huron Consulting Group

A-Score: 5.7/10

Value: 3.9

Growth: 7.7

Quality: 7.4

Yield: 0.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
CRAI

A-Score: 5.0/10

Value: 3.0

Growth: 6.8

Quality: 5.4

Yield: 2.0

Momentum: 6.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Resources Connection

A-Score: 4.5/10

Value: 8.5

Growth: 0.9

Quality: 3.8

Yield: 9.0

Momentum: 0.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Franklin Covey

A-Score: 4.1/10

Value: 6.3

Growth: 6.9

Quality: 6.9

Yield: 0.0

Momentum: 0.0

Volatility: 4.7

1-Year Total Return ->

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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

4.86$

Current Price

4.86$

Potential

-0.00%

Expected Cash-Flows