Earnings Update: Resources Connection, Inc. (NASDAQ:RGP) Just Reported And Analysts Are Trimming Their Forecasts

Last week, you might have seen that Resources Connection, Inc. (NASDAQ:RGP) released its full-year result to the market. The early response was not positive, with shares down 9.5% to US$4.98 in the past week. Revenues were in line with expectations, at US$551m, while statutory losses ballooned to US$5.80 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following the recent earnings report, the consensus from three analysts covering Resources Connection is for revenues of US$532.5m in 2026. This implies a perceptible 3.4% decline in revenue compared to the last 12 months. Earnings are expected to improve, with Resources Connection forecast to report a statutory profit of US$0.06 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$564.8m and earnings per share (EPS) of US$0.34 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

Check out our latest analysis for Resources Connection

The consensus price target fell 6.9% to US$9.00, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Resources Connection, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$5.00 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Resources Connection's past performance and to peers in the same industry. Over the past five years, revenues have declined around 2.6% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 3.4% decline in revenue until the end of 2026. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.8% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Resources Connection to suffer worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Resources Connection. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Resources Connection. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Resources Connection going out to 2028, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Resources Connection , and understanding this should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.