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RCMT

RCM Technologies NasdaqGM:RCMT Stock Report

Last Price

US$16.69

Market Cap

US$170.3m

7D

18.7%

1Y

162.8%

Updated

30 Sep, 2022

Data

Company Financials +
RCMT fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance5/6
Financial Health6/6
Dividends0/6

RCMT Stock Overview

RCM Technologies, Inc. provides business and technology solutions in the United States, Canada, Puerto Rico, and Serbia.

RCM Technologies Competitors

Price History & Performance

Summary of all time highs, changes and price drops for RCM Technologies
Historical stock prices
Current Share PriceUS$16.69
52 Week HighUS$28.82
52 Week LowUS$5.22
Beta0.89
1 Month Change-4.41%
3 Month Change-13.21%
1 Year Change162.84%
3 Year Change473.54%
5 Year Change196.98%
Change since IPO11.27%

Recent News & Updates

Sep 03
Should You Think About Buying RCM Technologies, Inc. (NASDAQ:RCMT) Now?

Should You Think About Buying RCM Technologies, Inc. (NASDAQ:RCMT) Now?

While RCM Technologies, Inc. ( NASDAQ:RCMT ) might not be the most widely known stock at the moment, it saw a...

Aug 16
Here's Why We Think RCM Technologies (NASDAQ:RCMT) Is Well Worth Watching

Here's Why We Think RCM Technologies (NASDAQ:RCMT) Is Well Worth Watching

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Aug 07

RCM Technologies: A Small-Cap, High Potential Cyclical Stock

RCM Technologies is a small-cap cyclical stock, which tends to outperform the market as the economy exits a recession, making this environment a breeding ground for high-risk high-reward scenarios. The company's healthcare segment is poised perfectly to leverage the high post-pandemic demand for healthcare services, and its engineering segment can greatly benefit from the increased government spending. The stock is currently undervalued by relative valuation metrics and is expected to show a strong topline growth, leading to a potential upside, making me bullish on it. Investment Thesis RCM Technologies Inc. (RCMT) has outperformed the market with triple digits in the previous year and YTD, experiencing an 85% share price gain during Q2 2022. The stock has been on a downward trend since June start, losing about 40% value in these 2 months. RCMT data by YCharts As a cyclical stock, RCM rides with the ups and downs of the economy, and a down-trending economy will likely reflect in the company's performance, as evident from the recent trend dictated by recessionary pressures. There appears to be ample opportunity for the company to grow its operations, especially in its healthcare segment in the wake of the pandemic and the engineering segment with the growing alternative and renewable energy markets. Additionally, counter to intuition, small caps tend to outperform the broader market during the second half of a recession, making this a suitable environment for investment in a small-cap company. Risk-averse investors would benefit from staying away from cyclical stocks in the prevailing market conditions and investing in inflation hedges. In contrast, investors who can stomach the volatility of a down-trending economy on a cyclical stock are likely to benefit from long-term capital appreciation through investing in RCMT. The Company RCM Technologies is a single-source business and technology solutions provider with a vertical focus on an integrated suite of services through a global delivery platform. The company provides project management and consulting services through three segments; Engineering, Specialty Health Care, and Life Sciences and Information Technology (LS&IT). The Specialty Health Care segment accounts for about 64% of the company's revenue, followed by the Engineering segment's 24% and LS&IT's 12%. Each segment reported YoY revenue growth of 147%, 38%, and 84%, respectively. The Specialty Healthcare Segment This segment engages in long and short-term staffing and placement services, serving hospitals, schools, long-term care facilities, etc., and performing staff augmentation services. It accounts for about two-thirds of the company's total revenue and more than doubled in the MRQ compared to Q1 2021. The segment's revenue originates through hourly billing, based on fixed contractual rates. This would incline one to think that RCMT can safely navigate the recession if it has enough long-term contracts. However, given that most of the company's contracts have a clause allowing its clients to terminate the contracts based on 60 or 90 days' notice, recessionary pressures on the economy may result in terminated contracts, straining the segment's revenue. However, one can expect more growth in this segment in the upcoming quarters, considering the company’s penetration in the schooling market. The healthcare segment has generated 79% of its revenue from school clients, exhibiting 66% YoY growth. There are almost 131 thousand schools in the United States, including 26,727 high schools and 87,498 elementary schools. The US Department of Education budget for the fiscal year 2022 includes $1 billion for a new School-Based Health Professionals grant program to support doubling the number of health professionals in schools, indicating a strong affinity to the increasing demand for the company’s services. The American Jobs Plan includes $10 billion in mandatory funding in 2022 and $50 billion over five years for grants to improve existing school facilities and construct new public elementary and secondary schools to help students of color and students from low-income families for closing the opportunity gap. One of the major factors this aims to address is the risk of poor healthcare facilities. Full-Service Community Schools (FSCS) program acts in partnership with community-based organizations, non-profit organizations, or other public and private entities to provide students with academic, social, and health services. The Education Department has recently announced its largest-ever $68 million grant for FY 2022, with President Biden requesting a phenomenal increase in the budget to $468 million for FY 2023. The significant surge in the American Job Plan grant and FSCS funding compared to the previous years leads to many new business opportunities in the healthcare industry, with RCMT as a primary beneficiary. The Engineering Segment RCMT’s services include analysis, design, drafting, and field services of mechanical, chemical, environmental, aeronautical, architectural, civil/structural, electrical, and electronic engineering, with a strong emphasis on acquiring government contracts. These services are also offered to the power generation industry, including nuclear energy, fossil fuel, and a customized mix of alternative and renewable power generation. To achieve net-zero carbon emissions by 2050, President Biden’s Budget for the Fiscal Year 2022 specifies the Department of Energy Budget, specifically focusing on creating the essential RDD of critical energy technologies to address the climate catastrophe. The Office of Energy Efficiency and Renewable Energy has requested $4.7 billion, including $300 million in grants to work with state and local governments to advance clean energy initiatives and $1 billion in new funding to deploy clean energy technologies that can provide affordable, pollution-free energy to more people. Additionally, the government aims to spend $2 trillion on infrastructure improvements over the decade, including: $115 billion to repair and rebuild bridges, highways, and roads; $100 billion to expand high-speed broadband across the entire country; $100 billion to upgrade and build new schools; and $100 billion to expand and improve power lines and spur a shift to clean energy. This will have a beneficial trickle-down effect on the economy, especially benefitting the firms like RCMT, directly involved in these infrastructure modifications. Apart from the well-established opportunities in the conventional energy sectors, this creates a significant opportunity for RCMT to expand its engineering operations in the renewable power sector, resulting in the company developing sustainable revenue streams. Low Cap Cyclical Stock and Recession Following a conventional chain of thought, one might be inclined to think that low-cap stocks would underperform large-cap stocks during recessions. Still, low-caps are precedented to outperform large-caps during recessions, high inflation, and rising interest rates. Historically, the first half of a recession is a prime moment to invest in low-cap stocks as their underperformance during this time, in line with the falling GDP, makes them much cheaper and attractively valued. Anchor Capital Advisors Small cap companies are more exposed to default and cyclical risks because of relatively higher leverage and shorter maturities, leading to investors prioritizing investing in highly liquid and safer stocks, i-e large caps. As a potentially stronger economy starts appearing on the horizon, investors tend to take on greater risk for a higher return, leading to increased investments in small-cap stocks. With a GDP rebound, small caps start outperforming large-cap stocks. According to data compiled by Anchor Capital Advisors, small caps have lagged for the first 5 to 6 months of the last 10 recessions. Small caps tend to outperform in the second half of a recession, with significant outperformance one year after the recession ends. Anchor Capital Advisors Valuation RCMT has a good P/E ratio compared to its peers, with a TTM multiple of 12x, especially considering the small market cap of $178.4 million. Some companies in other professional research and consultation industries include the Mistras Group (MG), a $186.6 million company with a P/E of 48.7x, and Where Food Comes From, Inc. (WFCF), a $68.7 million company with a P.E of 30.87x.

Shareholder Returns

RCMTUS Professional ServicesUS Market
7D18.7%-1.7%-2.5%
1Y162.8%-23.9%-23.2%

Return vs Industry: RCMT exceeded the US Professional Services industry which returned -22.8% over the past year.

Return vs Market: RCMT exceeded the US Market which returned -21.5% over the past year.

Price Volatility

Is RCMT's price volatile compared to industry and market?
RCMT volatility
RCMT Average Weekly Movement13.6%
Professional Services Industry Average Movement5.9%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: RCMT is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 14% a week.

Volatility Over Time: RCMT's weekly volatility (14%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
19713,880n/ahttps://www.rcmt.com

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.

RCM Technologies Fundamentals Summary

How do RCM Technologies's earnings and revenue compare to its market cap?
RCMT fundamental statistics
Market CapUS$170.26m
Earnings (TTM)US$21.26m
Revenue (TTM)US$266.70m

8.0x

P/E Ratio

0.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
RCMT income statement (TTM)
RevenueUS$266.70m
Cost of RevenueUS$191.59m
Gross ProfitUS$75.11m
Other ExpensesUS$53.85m
EarningsUS$21.26m

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.08
Gross Margin28.16%
Net Profit Margin7.97%
Debt/Equity Ratio0%

How did RCMT perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is RCMT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RCMT?

Other financial metrics that can be useful for relative valuation.

RCMT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.6x
Enterprise Value/EBITDA6.9x
PEG Ratio1.2x

Price to Earnings Ratio vs Peers

How does RCMT's PE Ratio compare to its peers?

RCMT PE Ratio vs Peers
The above table shows the PE ratio for RCMT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average23.5x
MG Mistras Group
51.8x61.7%US$132.9m
CIH China Index Holdings
2.7xn/aUS$81.4m
WFCF Where Food Comes From
24.6x19.0%US$57.2m
CRAI CRA International
15x4.6%US$635.9m
RCMT RCM Technologies
8x6.8%US$170.3m

Price-To-Earnings vs Peers: RCMT is good value based on its Price-To-Earnings Ratio (8x) compared to the peer average (23.5x).


Price to Earnings Ratio vs Industry

How does RCMT's PE Ratio compare vs other companies in the US Professional Services Industry?

Price-To-Earnings vs Industry: RCMT is good value based on its Price-To-Earnings Ratio (8x) compared to the US Professional Services industry average (16.7x)


Price to Earnings Ratio vs Fair Ratio

What is RCMT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RCMT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio8x
Fair PE Ratio11x

Price-To-Earnings vs Fair Ratio: RCMT is good value based on its Price-To-Earnings Ratio (8x) compared to the estimated Fair Price-To-Earnings Ratio (11x).


Share Price vs Fair Value

What is the Fair Price of RCMT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RCMT ($16.69) is trading below our estimate of fair value ($37.77)

Significantly Below Fair Value: RCMT is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but there are not enough analysts covering the stock to determine statistical confidence in agreement.


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Future Growth

How is RCM Technologies forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


6.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RCMT's forecast earnings growth (6.8% per year) is above the savings rate (1.9%).

Earnings vs Market: RCMT's earnings (6.8% per year) are forecast to grow slower than the US market (14.7% per year).

High Growth Earnings: RCMT's earnings are forecast to grow, but not significantly.

Revenue vs Market: RCMT's revenue (10.8% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: RCMT's revenue (10.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if RCMT's Return on Equity is forecast to be high in 3 years time


Discover growth companies

Past Performance

How has RCM Technologies performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


28.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RCMT has a high level of non-cash earnings.

Growing Profit Margin: RCMT's current net profit margins (8%) are higher than last year (0.2%).


Past Earnings Growth Analysis

Earnings Trend: RCMT's earnings have grown significantly by 28.6% per year over the past 5 years.

Accelerating Growth: RCMT's earnings growth over the past year (6840.9%) exceeds its 5-year average (28.6% per year).

Earnings vs Industry: RCMT earnings growth over the past year (6840.9%) exceeded the Professional Services industry 23.3%.


Return on Equity

High ROE: RCMT's Return on Equity (58.6%) is considered outstanding.


Discover strong past performing companies

Financial Health

How is RCM Technologies's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: RCMT's short term assets ($51.5M) exceed its short term liabilities ($33.8M).

Long Term Liabilities: RCMT's short term assets ($51.5M) exceed its long term liabilities ($2.4M).


Debt to Equity History and Analysis

Debt Level: RCMT is debt free.

Reducing Debt: RCMT has no debt compared to 5 years ago when its debt to equity ratio was 31.2%.

Debt Coverage: RCMT has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: RCMT has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


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Dividend

What is RCM Technologies's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

RCM Technologies Dividend Yield vs Market
How does RCM Technologies dividend yield compare to the market?
SegmentDividend Yield
Company (RCM Technologies)n/a
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (Professional Services)1.3%
Analyst forecast in 3 Years (RCM Technologies)n/a

Notable Dividend: Unable to evaluate RCMT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate RCMT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RCMT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RCMT's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as RCMT has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.3yrs

Average management tenure


CEO

RCM Technologies has no CEO, or we have no data on them.


Leadership Team

Experienced Management: RCMT's management team is considered experienced (4.3 years average tenure).


Board Members

Experienced Board: RCMT's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RCMT insiders have only sold shares in the past 3 months.


Recent Insider Transactions

NasdaqGM:RCMT Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
17 Aug 22SellUS$5,340Roger BallouIndividual300US$17.80
03 Jun 22SellUS$462,596Bradley ViziIndividual17,026US$27.17
03 Jun 22SellUS$270,200Michael SaksIndividual10,000US$27.02
19 May 22SellUS$985,886Kevin MillerIndividual46,605US$21.22
13 May 22SellUS$1,879,780Kevin MillerIndividual96,985US$20.25
10 May 22SellUS$515,375Richard GenoveseIndividual27,813US$18.53
09 May 22SellUS$725,600Roger BallouIndividual40,000US$18.14

Ownership Breakdown

What is the ownership structure of RCMT?
Owner TypeNumber of SharesOwnership Percentage
Hedge Funds737,9657.2%
Individual Insiders2,966,59629.1%
General Public3,217,99531.5%
Institutions3,278,95332.1%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 63.16% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
13.48%
Bradley Vizi
1,375,000$22.9m-10.83%no data
7.23%
Renaissance Technologies LLC
737,965$12.3m21.18%0.01%
5.69%
Kevin Miller
580,387$9.7m-19.34%no data
5.15%
Ben Andrews
525,000$8.8m0%no data
4.82%
Dimensional Fund Advisors LP
492,037$8.2m-8.77%no data
3.9%
WNY Asset Management, LLC
397,751$6.6m0%2.23%
3.26%
The Vanguard Group, Inc.
332,235$5.5m-10.23%no data
2.44%
EAM Investors, LLC
249,397$4.2m29.61%0.93%
2.37%
Acadian Asset Management LLC
242,228$4.0m15.78%0.01%
1.9%
Rutabaga Capital Management LLC
193,506$3.2m-56.8%2.64%
1.79%
Roger Ballou
182,582$3.0m-0.16%no data
1.54%
Bridgeway Capital Management, LLC
156,997$2.6m0%0.06%
1.3%
Hillsdale Investment Management Inc.
132,390$2.2m976.34%0.16%
1.06%
EAM Global Investors LLC
107,652$1.8m0%0.41%
0.97%
Michael Saks
99,343$1.7m-9.15%no data
0.94%
O'Shaughnessy Asset Management, LLC
96,188$1.6m76.23%0.03%
0.8%
Columbia Management Investment Advisers, LLC
82,114$1.4m-23.15%no data
0.67%
Engineers Gate Manager LP
68,230$1.1m0%0.04%
0.67%
Geode Capital Management, LLC
68,069$1.1m0.04%no data
0.64%
Frank Petraglia
65,777$1.1m43.69%no data
0.57%
Eaton Vance Management
58,445$975.4k0%no data
0.54%
Jayanth Komarneni
54,712$913.1k0%no data
0.49%
Swarna Kakodkar
49,820$831.5k0%no data
0.48%
BlackRock, Inc.
48,937$816.8k17.7%no data
0.45%
BNY Mellon Asset Management
46,164$770.5k0%no data

Company Information

RCM Technologies, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: RCM Technologies, Inc.
  • Ticker: RCMT
  • Exchange: NasdaqGM
  • Founded: 1971
  • Industry: Research and Consulting Services
  • Sector: Commercial Services
  • Implied Market Cap: US$170.263m
  • Shares outstanding: 10.20m
  • Website: https://www.rcmt.com

Number of Employees


Location

  • RCM Technologies, Inc.
  • 2500 McClellan Avenue
  • Suite 350
  • Pennsauken
  • New Jersey
  • 08109-4613
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RCMTNasdaqGM (Nasdaq Global Market)YesCommon StockUSUSDFeb 1980

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/30 00:00
End of Day Share Price2022/09/30 00:00
Earnings2022/07/02
Annual Earnings2022/01/01


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.