NasdaqGS:RECN

Stock Analysis Report

Executive Summary

Resources Connection, Inc. provides consulting services to business customers under the Resources Global Professionals name in North America, Europe, and the Asia Pacific.

Snowflake

Fundamentals

Excellent balance sheet and fair value.

Risks

  • Resources Connection is covered by less than 3 analysts.

Similar Companies

Share Price & News

How has Resources Connection's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

4.1%

NasdaqGS:RECN

1.1%

US Professional Services

1.1%

US Market


1 Year Return

2.3%

NasdaqGS:RECN

9.4%

US Professional Services

2.1%

US Market

RECN underperformed the Professional Services industry which returned 9.4% over the past year.

RECN matched the United States of America Market (2.1%) over the past year.


Share holder returns

RECNIndustryMarket
7 Day4.1%1.1%1.1%
30 Day2.7%0.6%3.7%
90 Day7.7%5.3%2.3%
1 Year5.7%2.3%10.4%9.4%4.4%2.1%
3 Year36.8%24.3%51.6%46.4%47.0%37.4%
5 Year41.2%22.4%82.5%72.6%61.6%43.8%

Price Volatility Vs. Market

How volatile is Resources Connection's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Resources Connection undervalued based on future cash flows and its price relative to the stock market?

17.51x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Resources Connection's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Resources Connection's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

Resources Connection is good value based on earnings compared to the US Professional Services industry average.

Resources Connection is good value based on earnings compared to the United States of America market.


Price Based on Expected Growth

Resources Connection is poor value based on expected growth next year.


Price Based on Value of Assets

Resources Connection is good value based on assets compared to the US Professional Services industry average.


Next Steps

Future Growth

How is Resources Connection expected to perform in the next 1 to 3 years based on estimates from 2 analysts?

6.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Resources Connection's revenue is expected to grow by 0.7% yearly, however this is not considered high growth (20% yearly).

Resources Connection's earnings are expected to grow by 6.4% yearly, however this is not considered high growth (20% yearly).

Resources Connection's revenue growth is positive but not above the United States of America market average.

Resources Connection's earnings growth is positive but not above the United States of America market average.

Resources Connection's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Resources Connection is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Resources Connection performed over the past 5 years?

-1.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Resources Connection's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

Resources Connection's 1-year earnings growth exceeds its 5-year average (67.1% vs -1.7%)

Resources Connection's earnings growth has exceeded the US Professional Services industry average in the past year (67.1% vs 37.9%).


Return on Equity

Resources Connection has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Resources Connection used its assets more efficiently than the US Professional Services industry average last year based on Return on Assets.


Return on Capital Employed

Resources Connection's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Resources Connection's financial position?


Financial Position Analysis

Resources Connection is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Resources Connection's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Resources Connection's level of debt (15.2%) compared to net worth is satisfactory (less than 40%).

Unable to establish if Resources Connection's debt level has increased without past 5-year debt data.

Debt is well covered by operating cash flow (101.4%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 22.6x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 4.5x debt.


Next Steps

Dividend

What is Resources Connection's current dividend yield, its reliability and sustainability?

3.21%

Current Dividend Yield


Dividend Yield and Payments Analysis

Resources Connection's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.43%).

Resources Connection's dividend is below the markets top 25% of dividend payers in United States of America (3.67%).

Whilst dividend payments have been stable, Resources Connection has been paying a dividend for less than 10 years.

Dividend payments have increased, but Resources Connection only paid a dividend in the past 9 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.9x coverage).


Future Payout to Shareholders

Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.


Next Steps

Management

What is the CEO of Resources Connection's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Kate Duchene (56yo)

2.8yrs

Tenure

US$1,605,961

Compensation

Ms. Kate W. Duchene has been Chief Executive Officer of Resources Connection, Inc. since December 19, 2016. Ms. Duchene serves as Executive Vice President and Chief Legal Officer of Resources Connection LL ...


CEO Compensation Analysis

Kate's remuneration is about average for companies of similar size in United States of America.

Kate's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

1.8yrs

Average Tenure

53yo

Average Age

The average tenure for the Resources Connection management team is less than 2 years, this suggests a new team.


Board Age and Tenure

12.5yrs

Average Tenure

69.5yo

Average Age

The average tenure for the Resources Connection board of directors is over 10 years, this suggests they are a seasoned and experienced board.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellUS$88,88905 Apr 19
Susan Crawford
EntityIndividual
Role
Member of the Board of Directors
Director
Shares5,894
Max PriceUS$15.25

Ownership Breakdown


Management Team

  • Don Murray (72yo)

    Co-Founder & Executive Chairman

    • Tenure: 20.4yrs
    • Compensation: US$400.00k
  • Kate Duchene (56yo)

    CEO, President & Director

    • Tenure: 2.8yrs
    • Compensation: US$1.61m
  • Suzi Stanton (58yo)

    Senior Vice President of Revenue

    • Tenure: 1.8yrs
  • Susan Hicks

    Vice President of Sales

    • Tenure: 0yrs
  • Brandon Johnson (53yo)

    Chief Information Officer & Executive VP of Corporate Operations

    • Tenure: 0yrs
  • Nestor Gonzalez-Monroy (46yo)

    Senior Managing Director – Latin America

    • Tenure: 11.1yrs
  • Tim Brackney (47yo)

    President & COO

    • Tenure: 0.4yrs
  • Alice Washington

    General Counsel

    • Tenure: 0yrs
  • Jennifer Ryu (44yo)

    Interim Chief Financial Officer

    • Tenure: 0.08yrs
  • Michael Allen

    Vice President of F&A and Technology & Digital

    • Tenure: 0.08yrs

Board Members

  • Neil Dimick (70yo)

    Director

    • Tenure: 15.8yrs
    • Compensation: US$174.99k
  • Bob Kistinger (66yo)

    Director

    • Tenure: 13.1yrs
    • Compensation: US$157.49k
  • Don Murray (72yo)

    Co-Founder & Executive Chairman

    • Tenure: 20.4yrs
    • Compensation: US$400.00k
  • Kate Duchene (56yo)

    CEO, President & Director

    • Tenure: 2.8yrs
    • Compensation: US$1.61m
  • Jolene Sykes-Sarkis (69yo)

    Director

    • Tenure: 17.4yrs
    • Compensation: US$164.99k
  • Bob Pisano (76yo)

    Lead Independent Director

    • Tenure: 15.7yrs
    • Compensation: US$179.99k
  • Tony Cherbak (65yo)

    Director

    • Tenure: 10.1yrs
    • Compensation: US$167.05k
  • Michael Wargotz (60yo)

    Director

    • Tenure: 10.3yrs
    • Compensation: US$159.99k
  • Anne Shih (72yo)

    Director

    • Tenure: 11.9yrs
    • Compensation: US$152.49k
  • Susan Crawford (72yo)

    Director

    • Tenure: 10.3yrs
    • Compensation: US$152.49k

Company Information

Resources Connection, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Resources Connection, Inc.
  • Ticker: RECN
  • Exchange: NasdaqGS
  • Founded: 1996
  • Industry: Research and Consulting Services
  • Sector: Commercial Services
  • Market Cap: US$557.561m
  • Shares outstanding: 31.97m
  • Website: https://www.rgp.com

Number of Employees


Location

  • Resources Connection, Inc.
  • 17101 Armstrong Avenue
  • Suite 201
  • Irvine
  • California
  • 92614
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RECNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDDec 2000
RCODB (Deutsche Boerse AG)YesCommon StockDEEURDec 2000

Biography

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 th ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/17 23:39
End of Day Share Price2019/09/17 00:00
Earnings2019/05/25
Annual Earnings2019/05/25


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.