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 Analysis

Excellent balance sheet established dividend payer.


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

Stable Share Price: RECN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.1%

RECN

11.0%

US Professional Services

9.9%

US Market


1 Year Return

-37.8%

RECN

-7.5%

US Professional Services

-11.9%

US Market

Return vs Industry: RECN underperformed the US Professional Services industry which returned -5.5% over the past year.

Return vs Market: RECN underperformed the US Market which returned -9.1% over the past year.


Shareholder returns

RECNIndustryMarket
7 Day8.1%11.0%9.9%
30 Day-17.9%-17.2%-15.0%
90 Day-36.9%-18.8%-21.5%
1 Year-35.5%-37.8%-6.8%-7.5%-10.0%-11.9%
3 Year-32.0%-38.6%18.0%14.3%12.3%5.1%
5 Year-31.7%-41.4%34.6%27.3%32.5%18.1%

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?

10.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RECN ($10.29) is trading below our estimate of fair value ($11.5)

Significantly Below Fair Value: RECN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: RECN is good value based on its PE Ratio (10x) compared to the Professional Services industry average (11.8x).

PE vs Market: RECN is good value based on its PE Ratio (10x) compared to the US market (13.4x).


Price to Earnings Growth Ratio

PEG Ratio: RECN is poor value based on its PEG Ratio (18.3x)


Price to Book Ratio

PB vs Industry: RECN is good value based on its PB Ratio (1.1x) compared to the US Professional Services industry average (1.7x).


Next Steps

Future Growth

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

0.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RECN's forecast earnings growth (0.5% per year) is below the savings rate (1.7%).

Earnings vs Market: RECN's earnings (0.5% per year) are forecast to grow slower than the US market (12.3% per year).

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

Revenue vs Market: RECN's revenue (0.5% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: RECN's revenue (0.5% 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?

-0.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RECN has high quality earnings.

Growing Profit Margin: RECN's current net profit margins (4.5%) are higher than last year (3.4%).


Past Earnings Growth Analysis

Earnings Trend: RECN's earnings have declined by -0.4% per year over the past 5 years.

Accelerating Growth: RECN's earnings growth over the past year (30.5%) exceeds its 5-year average (-0.4% per year).

Earnings vs Industry: RECN earnings growth over the past year (30.5%) exceeded the Professional Services industry 13.9%.


Return on Equity

High ROE: RECN's Return on Equity (10.8%) is considered low.


Next Steps

Financial Health

How is Resources Connection's financial position?


Financial Position Analysis

Short Term Liabilities: RECN's short term assets ($189.4M) exceed its short term liabilities ($97.9M).

Long Term Liabilities: RECN's short term assets ($189.4M) exceed its long term liabilities ($98.2M).


Debt to Equity History and Analysis

Debt Level: RECN's debt to equity ratio (18%) 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 (109.6%).

Interest Coverage: RECN's interest payments on its debt are well covered by EBIT (24.4x 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 3.5x debt).


Next Steps

Dividend

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

5.44%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RECN's dividend (5.44%) is higher than the bottom 25% of dividend payers in the US market (1.93%).

High Dividend: RECN's dividend (5.44%) is in the top 25% of dividend payers in the US market (5.33%)


Stability and Growth of Payments

Stable Dividend: RECN's dividends per share have been stable in the past 10 years.

Growing Dividend: RECN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (52.7%), 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

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

0.8yrs

Average management tenure


CEO

Kate Duchene (56yo)

3.25s

Tenure

US$1,874,322

Compensation

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


CEO Compensation Analysis

Compensation vs Market: Kate's total compensation ($USD1.87M) is about average for companies of similar size in the US market ($USD2.10M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Donald Murray
Co-Founder & Executive Chairman20.92yrsUS$400.00k3.77% $12.5m
Kate Duchene
CEO, President & Director3.25yrsUS$1.87m0.60% $2.0m
Timothy Brackney
Chief Operating Officer0.92yrUS$1.60m0.20% $659.5k
Jennifer Ryu
CFO & Executive VP0.58yrno data0.031% $102.9k
Michael Allen
Vice President of F&A and Technology & Digital0.58yrno datano data
Bob Castle
Interim Chief Information Officer0.50yrno datano data
Alice Washington
General Counselno datano datano data
Susan Hicks
Vice President of Salesno datano datano data
Katy Conway
Chief People Officer0.17yrno datano data
Suzanne Stanton
Senior Vice President of Revenue2.25yrsno datano data

0.8yrs

Average Tenure

56yo

Average Age

Experienced Management: RECN's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Donald Murray
Co-Founder & Executive Chairman20.92yrsUS$400.00k3.77% $12.5m
Kate Duchene
CEO, President & Director3.25yrsUS$1.87m0.60% $2.0m
Neil Dimick
Independent Director16.33yrsUS$175.00k0.15% $502.6k
Robert Kistinger
Independent Director13.58yrsUS$157.50k0.15% $502.6k
Jolene Sykes-Sarkis
Independent Director17.92yrsUS$165.00k0.15% $502.6k
A. Pisano
Lead Independent Director16.17yrsUS$180.00k0.23% $755.6k
Anthony Cherbak
Director10.58yrsUS$150.00k0.16% $545.4k
Michael Wargotz
Independent Director10.83yrsUS$160.00k0.15% $502.6k
Anne Shih
Independent Director12.42yrsUS$152.50k0.19% $627.3k
Susan Crawford
Independent Director10.83yrsUS$152.50k0.15% $502.6k

13.0yrs

Average Tenure

69.5yo

Average Age

Experienced Board: RECN's board of directors are seasoned and experienced ( 13 years average tenure).


Ownership

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


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$330.720m
  • Shares outstanding: 32.14m
  • Website: https://www.rgp.com

Number of Employees


Location

  • Resources Connection, Inc.
  • 17101 Armstrong Avenue
  • Suite 100
  • 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 the areas of business strategy and transformation, including program and project management, change management, transaction advisory, executive search, human resources, supply chain, and legal services; and risk and compliance, such as information security and privacy, internal audit and compliance, and operational risk management areas. It also provides finance and accounting services comprising lease accounting, revenue recognition, financial operations, equity administration and accounting, and tax; and technology and digital services that include business technology, data analytics, and robotics process automation. 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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 02:31
End of Day Share Price2020/03/27 00:00
Earnings2019/11/23
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.