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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Resources Connection, Inc. (XNAS:RGP) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RGP
Name:
RESOURCES CONNECTION, INC. (XNAS:RGP)
Sector:
- 557.00K
Industry:
Consulting Services
CEO:
Ms. Kate W. Duchene
Total Employees:
4,259
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -172.01% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RESOURCES CONNECTION, INC.(RGP) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CONSULTING SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
19.39
One Month Price Target:
$19.48
Six Month Price Target :
$19.91
Likely Price in One Year's Time:
Ticker:
$20.43
Likely Trading Range Today Under (Normal Volatility)
$19.32
Price Upper limit ($) :
$19.49
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$18.35
This week:
$17.07
This month :
$14.75
Other Primary facts
Market Cap:
653.42M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
33.46M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.2%
-13.6%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$24.21
$21.99
$14.57
$16.79
Medium risk (<10%) entry points
Buy Call
Sell Call
$21.27
Buy Put:
Sell Put:
$20.79
$17.51
$17.99
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RGP
Sharpe Ratio:
2.14%
Comparison:
RGP, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -0.66% lower than the industry
& is -6.04% lower than the market/S&P 500 average
Average Returns/Yield of
RGP
Daily returns:
0.07%
Weekly returns:
0.33%
Monthly returns:
1.31%
Yearly returns:
14.72%
Comparison of returns:
Average annual returns/yield (last 3 years) is 6.57% above industry average
Classification:
RGP, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.52
Statistical test of Returns:
RGP has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.64%
Weekly Volatility:
5.90%
Monthly Volatility:
11.80%
Yearly Volatility:
40.88%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.16%
Volatility in last five trading days has been -56.09% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.35%
Weekly VaR:
-11.97%
Monthly VaR:
-23.95%
How Much Can the price of
RGP
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-82.95%
This translates to price declining to:
$15.43
This translates to price declining to:
$3.31
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
RGP is a 69.01% riskier investment compared to the market/S&P 500 & is 44.79% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 7.61% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RGP
Beta in relation to market/S&P 500--0.79
Expected beta in 1 year's time:
0.888
Expected beta in 3 year's time:
1.256
Unlevered (debt free) Beta:
0.691
Beta in relation to Nasdaq (XNAS):
0.444
Beta in relation to all global stocks::
0.588
Beta Comparison & Analysis
Beta of competitors/peers::
0.982
Beta is -19.06% lower than peers
Average Industry Beta:
0.889
Beta is -10.63% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.78%
Sustainable growth rate is -38.34% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.071
Alpha is 29.44% above industry average alpha yield
Alpha is 452% higher than market/& is unsustainably high
Analysis of Cost of Capital of
RGP
Equity cost of capital:
0.086
Equity cost of capital is -7.00% below industry mean WACC
Unlevered (without debt) cost of capital:
7.47%
Before-tax cost of debt:
1.67%
After-tax cost of debt:
1.32%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.32%
WACC is 19.00% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$22.72
Revenue growth rate per share of (3Y):
1.9
Annual revenue growth rate is -142.01% below industry average
EPS:
-$0.57
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.71
Balance sheet equity growth per share: 21.05%
Equity growth rate per share is 82.67% higher than the industry
Debt per share
$1.55
EBITDA per share
$2.39
Valuation Analysis Today of
RGP
P/E Ratio:
9.68
P/E Ratio of Competitors/Peers:
27.97
P/E ratio is -65.39% lower than main peers & is -49.91% lower than the industry
-
RGP is -276.00% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $14.02
Present value of the expected future dividends only: $6.52
P/S (Price to Sales ratio):
0.85
Price to sales ratio is -75.08% below the industry mean
P/B (Price to book value ratio):
1.9
Price to free cash flow: 27.26
Price to free cash flow ratio is 137.20% higher than the industry
Net income growth rate (3Y):
26.98%
Net income growth rate is -74.10% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.59%
Dividend yeild: 2.89%
Previous Dividend: $0.14
Previous adjusted dividend: $0.14
Previous Dividend: $0.56
-
-
Average dividend payment (long-term): $0.14
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 09/06/2022
Expected next dividend record date: 08/09/2022
Expected next dividend declaration date: 07/12/2022
Previous dividend payment date: 06/08/2022
Previous dividend record date: 05/11/2022
Previous dividend declaration date: 13/04/2022
Dividend History:
2022-05-10--$0.14
2021-11-17--$0.14
2021-05-12--$0.14
2022-02-16--$0.14
2021-08-25--$0.14
2021-02-17--$0.14
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
15.21%
Net debt to equity ratio:
-0.06%
Debt to assets ratio:
10.08%
Net debt to assets ratio:
-0.04%
Debt-to-asset ratio is -82.67% below industry average
Ability to repay debt:
Interest coverage ratio:
77.84
Interest coverage ratio is 307.33% more than industry average
Looking forward:
Debt growth rate:
-43.07%
Annual debt growth is -281% lower than industry average debt growth rate
Debt repayment rate in last quarter: 16.17%
Analysis of Key Statistics
Correlation of price movement with the market:
0.408
Statistical significance of correlation:
RGP has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.51
Stock price is -20.12% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.51
Correlation of price movement with Nasdaq (^IXIC):
0.031
Covariance of price movement with the market:
0.048
Kurtosis
6.118
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.578
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
RGP
Gross Profit Margin Ratio:
155%
Operating Profit Margin Ratio:
9.31%
Operating profit margin is -18.04% lower than the industry
Net Profit Margin Ratio:
155%
Effective Tax Rate:
1.06%
Effective tax rate is -94.65% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.51%
Return on equity (ROE) is -0.84% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
13.58%
Return on assets (ROA) is 84.01% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
2.45
Current ratio is 48.28% above industry average
Cash Conversion Cycle (days):
80.3
Cash conversion cycle is 287.94% above industry average
The remaining useful life of property plant & equipment is: 4.6 years
Stock based compensation to net income ratio:
2.33%
In-depth Efficiency Analysis
Revenue generated per employee:
178.5K
Each employee generates -45% less revenue than industry average revenue per employee
EBITDA generated per employee:
18.8K
Each employee generates -77% less EBITDA than industry average revenue per employee
Profit generated per employee:
16.4K
Each employee generates -65% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 0.1K
Each employee generates -99% less free cash flow than industry average revenue per employee
Assets/Capital per employee
66.1K
Each employee generates -99% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
RGP
ASTRONICS CORPORATION (XNAS:ATRO)
MUDRICK CAPITAL ACQ II UNT (XNAS:MUDSU)
DISTRIBUTION SOLUTIONS GROUP, INC. (XNAS:DSGR)
WILLDAN GROUP, INC. (XNAS:WLDN)
AERSALE CORPORATION (XNAS:ASLE)
GSHT
CONCRETE PUMPING HOLDINGS, INC. (XNAS:BBCP)
XONE
LMRKN
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
2/26/22
Revenue:
760.30M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
465.05M
295.25M
-
-
216.15M
-
8.35M
224.49M
-
1.03M
8.35M
80.02M
70.76M
69.90M
70.64M
746.00K
69.90M
Statement of Cash Flow
Date:
Period:
2.02M
Differed Income Tax :
- 52.00K
Stock Based Compensation :
1.63M
Change in Working Capital :
- 16945.00K
Accounts Receivables:
- 13767.00K
Other Working Capital:
137.87M
Other Non-Cash Items:
887.00K
Net Cash Provided by Operating Activities:
464.00K
Investments in PP&E:
- 1021.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
8/28/21
2022
Q1
61.90M
-
61.90M
164.63M
-
6.73M
233.25M
42.74M
215.93M
19.70M
-
1.55M
1.46M
281.38M
-
514.64M
18.14M
9.83M
-
-
67.41M
95.38M
51.86M
8.32M
78.41M
-
173.79M
649.00K
375.43M
- 9228.0K
- 26002.00K
August 28, 2021 at 6:00:00 AM
689.55M
340.85M
514.64M
-
61.69M
- 210.0K
-
15.00K
- 1006.00K
- 10000.00K
-
-
- 4603.00K
3.22M
- 11387.00K
- 563.00K
- 12492.00K
61.90M
74.39M
464.00K
- 1021.00K
- 557.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
RGP
2023
2024
2025
2026
2027
$20.53
$13.18
$13.88
$14.62
$15.40