Resources Connection, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Investors in Resources Connection, Inc. (NASDAQ:RGP) had a good week, as its shares rose 9.2% to close at US$11.60 following the release of its yearly results. It looks like a credible result overall - although revenues of US$633m were what the analysts expected, Resources Connection surprised by delivering a (statutory) profit of US$0.62 per share, an impressive 71% above what was forecast. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Resources Connection

Taking into account the latest results, the current consensus, from the four analysts covering Resources Connection, is for revenues of US$612.4m in 2025. This implies a small 3.2% reduction in Resources Connection's revenue over the past 12 months. Statutory earnings per share are forecast to tumble 27% to US$0.46 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$651.8m and earnings per share (EPS) of US$0.62 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

The analysts made no major changes to their price target of US$14.50, suggesting the downgrades are not expected to have a long-term impact on Resources Connection's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Resources Connection at US$19.00 per share, while the most bearish prices it at US$11.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.2% by the end of 2025. This indicates a significant reduction from annual growth of 1.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.5% annually for the foreseeable future. It's pretty clear that Resources Connection's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$14.50, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Resources Connection going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Resources Connection that you need to take into consideration.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com