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.


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

5.5%

RECN

0.5%

US Professional Services

1.0%

US Market


1 Year Return

-13.9%

RECN

19.8%

US Professional Services

8.0%

US Market

Return vs Industry: RECN underperformed the US Professional Services industry which returned 19.8% over the past year.

Return vs Market: RECN underperformed the US Market which returned 8% over the past year.


Shareholder returns

RECNIndustryMarket
7 Day5.5%0.5%1.0%
30 Day-18.1%-0.1%-0.07%
90 Day-13.7%-0.3%-1.0%
1 Year-11.1%-13.9%21.0%19.8%10.4%8.0%
3 Year9.8%-0.2%55.5%50.3%46.2%36.7%
5 Year14.3%-1.0%86.9%76.8%64.3%46.2%

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 compared to its fair value and its price relative to the market?

14.95x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RECN ($14.51) is trading above our estimate of fair value ($13.08)

Significantly Below Fair Value: RECN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: RECN is good value based on its PE Ratio (15x) compared to the Professional Services industry average (20.8x).

PE vs Market: RECN is good value based on its PE Ratio (15x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: RECN is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: RECN is good value based on its PB Ratio (1.6x) compared to the US Professional Services industry average (2.4x).


Next Steps

Future Growth

How is Resources Connection forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

7.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RECN's forecast earnings growth (7.1% per year) is above the savings rate (2.7%).

Earnings vs Market: RECN's earnings (7.1% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: RECN's revenue (0.7% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: RECN's revenue (0.7% 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 RECN's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Resources Connection performed over the past 5 years?

-1.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: RECN's earnings have declined by -1.3% per year over the past 5 years.

Accelerating Growth: RECN's earnings growth over the past year (36.8%) exceeds its 5-year average (-1.3% per year).

Earnings vs Industry: RECN earnings growth over the past year (36.8%) underperformed the Professional Services industry 36.8%.


Return on Equity

High ROE: RECN's Return on Equity (10.6%) is considered low.


Return on Assets

ROA vs Industry: RECN's Return on Assets is below or equal to the Professional Services industry average last year.


Return on Capital Employed

ROCE Improving: RECN's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Resources Connection's financial position?


Financial Position Analysis

Short Term Liabilities: RECN's short term assets ($183.4M) exceeds its short term liabilities ($89.0M)

Long Term Liabilities: RECN's short term assets (183.4M) exceeds its long term liabilities (119.2M)


Debt to Equity History and Analysis

Debt Level: RECN's debt to equity ratio (25.3%) is considered satisfactory

Reducing Debt: Insufficient data to determine if RECN's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: RECN's debt is well covered by operating cash flow (78.3%).

Interest Coverage: RECN's interest payments on its debt are well covered by EBIT (23.1x coverage).


Balance Sheet

Inventory Level: RECN has a low level of unsold assets or inventory.

Debt Coverage by Assets: RECN's debt is covered by short term assets (assets are 2.512040x debt).


Next Steps

Dividend

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

3.86%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Resources Connection before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: RECN's dividend (3.86%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: RECN's dividend (3.86%) is in the top 25% of dividend payers in the US market (3.68%)

Stable Dividend: Whilst dividend payments have been stable, RECN has been paying a dividend for less than 10 years.

Growing Dividend: RECN's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (54.6%), RECN's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

1.2yrs

Average management tenure


CEO

Kate Duchene (56yo)

2.8yrs

Tenure

US$1,874,322

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

Compensation vs. Market: Kate's total compensation ($USD1.87M) is about average for companies of similar size in the US market ($USD1.82M).

Compensation vs Earnings: Kate's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.2yrs

Average Tenure

51.5yo

Average Age

Experienced Management: RECN's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Age and Tenure

12.6yrs

Average Tenure

69.5yo

Average Age

Experienced Board: RECN's board of directors are seasoned and experienced ( 12.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


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: 20.5yrs
    • Compensation: US$400.00k
  • Kate Duchene (56yo)

    CEO & Director

    • Tenure: 2.8yrs
    • Compensation: US$1.87m
  • Suzi Stanton (58yo)

    Senior Vice President of Revenue

    • Tenure: 1.8yrs
  • Susan Hicks

    Vice President of Sales

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

    Senior Managing Director – Latin America

    • Tenure: 11.2yrs
  • Tim Brackney (47yo)

    President & COO

    • Tenure: 0.5yrs
    • Compensation: US$1.60m
  • Alice Washington

    General Counsel

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

    Interim Chief Financial Officer

    • Tenure: 0.2yrs
  • Michael Allen

    Vice President of F&A and Technology & Digital

    • Tenure: 0.2yrs
  • Bob Castle

    Interim Chief Information Officer

    • Tenure: 0.08yrs

Board Members

  • Neil Dimick (70yo)

    Independent Director

    • Tenure: 15.9yrs
    • Compensation: US$175.00k
  • Bob Kistinger (66yo)

    Independent Director

    • Tenure: 13.2yrs
    • Compensation: US$157.50k
  • Don Murray (72yo)

    Co-Founder & Executive Chairman

    • Tenure: 20.5yrs
    • Compensation: US$400.00k
  • Kate Duchene (56yo)

    CEO & Director

    • Tenure: 2.8yrs
    • Compensation: US$1.87m
  • Jolene Sykes-Sarkis (69yo)

    Independent Director

    • Tenure: 17.5yrs
    • Compensation: US$165.00k
  • Bob Pisano (76yo)

    Lead Independent Director

    • Tenure: 15.8yrs
    • Compensation: US$180.00k
  • Tony Cherbak (65yo)

    Director

    • Tenure: 10.2yrs
    • Compensation: US$150.00k
  • Michael Wargotz (60yo)

    Independent Director

    • Tenure: 10.4yrs
    • Compensation: US$160.00k
  • Anne Shih (72yo)

    Independent Director

    • Tenure: 12yrs
    • Compensation: US$152.50k
  • Susan Crawford (72yo)

    Director

    • Tenure: 10.4yrs
    • Compensation: US$152.50k

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$464.714m
  • Shares outstanding: 32.03m
  • 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 Analysis2019/10/21 23:45
End of Day Share Price2019/10/21 00:00
Earnings2019/08/24
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.