Rgp
7/28/2025 06:39am
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The deep research logic is organized as follows:
Okay, let's tackle this question about RGP. The user is asking for an analysis of Resources Connection (RGP) based on the provided data and references. First, I need to go through all the references and background information to gather the necessary data points.
Starting with the financial data from References 1, 2, and 3. RGP's latest Q3 2025 results show a net loss of $44.05 million, revenue of $129.44 million, and a diluted EPS of -$1.34. The year-over-year growth rates are negative across the board: net income down 1827.53%, revenue down 14.45%, and EPS down 1775%. The 3-year CAGR for net income, revenue, and EPS are all negative, around -44%, -11%, and -44% respectively. This indicates significant financial struggles over the past few years.
Next, the valuation metrics from Reference 4 show a P/E ratio of -1.77, which is negative because the company is losing money. The P/S ratio is 0.34, and the P/B ratio is 0.69. These suggest that the stock is trading at a discount relative to its sales and book value, but the negative P/E is a red flag.
Looking at the news articles (References 6, 8, 9, 10, 19), RGP's Q4 2025 earnings report shows mixed results. Revenue exceeded guidance, but there was a significant net loss. The company is focusing on higher-margin consulting work and cost efficiency. However, there's a $69 million impairment charge, which is a one-time hit. The company also has a dividend, which might appeal to some investors, but the high net loss margin (52.6%) is concerning.
The user's profile mentions they're interested in technology stocks and have a moderate risk tolerance. They look at factors like P/E ratio, GICS sector, and pre-market changes. RGP is in the consulting sector, which isn't tech, but the company is pivoting towards digital transformation and higher-margin services, which could align with tech trends.
The user also prefers blue-chip stocks, but RGP's market cap isn't specified here. The stock price is $5.79, which is relatively low. The recent price change of +9.87% (from Reference 2) might indicate some positive sentiment, but the lack of analyst ratings (References 5, 15, 18, 24) suggests limited institutional coverage, which could be a risk.
Putting this together, RGP has significant financial challenges with negative growth rates and a high net loss. However, the company is making strategic moves towards higher-margin services and cost management. The valuation metrics are mixed, with low P/S and P/B but a negative P/E. The user's interest in tech and growth might find some appeal in RGP's pivot to digital consulting, but the financial health is a major concern. The lack of analyst coverage could mean the stock is undervalued or overlooked, but it also poses higher risk.
I need to structure the answer with a clear conclusion first, then detailed analysis using tables and citations. Make sure to highlight the key points: financial struggles, strategic pivots, valuation, and the user's investment preferences. Also, include the visualization for the financial data as per the requirements.
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### Conclusion 🎯
**Resources Connection (RGP)** faces significant financial headwinds with **massive year-over-year losses** and **negative growth rates**, but its strategic pivot toward **high-margin consulting** and **cost efficiency** offers a potential long-term upside. The stock’s **low valuation multiples** (P/S = 0.34, P/B = 0.69) suggest a **discounted price**, but the **lack of analyst coverage** and **high operational risks** (e.g., $69M impairment charge) warrant caution. For tech-focused investors with a **medium-long term horizon**, RGP could be a **speculative play** on its ability to **reposition** in the consulting sector.
---
### 📊 Key Financial Data (Q3 2025)
| Metric | Value | YoY Growth Rate | 3-Year CAGR |
|------------------------|----------------|------------------|-------------|
| **Net Income** | -$44.05M | -1827.53% | -44.04% |
| **Revenue** | $129.44M | -14.45% | -11.34% |
| **Diluted EPS** | -$1.34 | -1775% | -44.32% |
|code|Ticker|Name|Date|Net Income YoY|Net Income|market_code|
|---|---|---|---|---|---|---|
|RGP|RGP.O|Resources Connection|2024 Q4|-11.012916383412644|1.0472E7|185|
|RGP|RGP.O|Resources Connection|2025 Q1|-283.09271735643244|-5707000|185|
|RGP|RGP.O|Resources Connection|2025 Q2|-1503.779366700715|-6.8715E7|185|
|RGP|RGP.O|Resources Connection|2025 Q3|-1827.5294117647056|-4.4052E7|185|
|code|Ticker|Name|Date|Total Revenue YoY|Total Revenue|market_code|
|---|---|---|---|---|---|---|
|RGP|RGP.O|Resources Connection|2024 Q4|-19.653671204506395|1.48198E8|185|
|RGP|RGP.O|Resources Connection|2025 Q1|-19.529996650388732|1.36935E8|185|
|RGP|RGP.O|Resources Connection|2025 Q2|-10.73335499334874|1.45618E8|185|
|RGP|RGP.O|Resources Connection|2025 Q3|-14.45339607552856|1.29438E8|185|
|code|Ticker|Name|Date|Diluted EPS YoY|Diluted EPS|market_code|
|---|---|---|---|---|---|---|
|RGP|RGP.O|Resources Connection|2025 Q1|-288.8888888888889|-0.17|185|
|RGP|RGP.O|Resources Connection|2025 Q2|-1585.7142857142858|-2.08|185|
|RGP|RGP.O|Resources Connection|2025 Q3|-1775|-1.34|185|
**Key Takeaway**: RGP’s financials are deteriorating rapidly, with **net losses tripling** YoY and **revenue shrinking**. The company’s **3-year CAGR** reflects sustained underperformance across all metrics.
---
### 📉 Valuation & Market Context
| Metric | Value | Implication |
|------------------------|----------------|-------------|
| **P/E (TTM)** | -1.77 | Negative due to losses |
| **P/S (TTM)** | 0.34 | Undervalued relative to sales |
| **P/B (TTM)** | 0.69 | Below book value; potential upside |
**Analysis**: RGP’s **P/S ratio** is attractive for a consulting firm, but the **negative P/E** highlights near-term risks. The **P/B ratio** suggests the stock is trading at a discount to its book value, which could appeal to value investors. However, the lack of **analyst ratings** raises concerns about institutional confidence.
---
### 🌐 Strategic Shifts & Risks
1. **Focus on High-Margin Services**: RGP is prioritizing **digital transformation** and **CFO advisory** services, with **average bill rates rising 4.2% YoY** . This pivot aligns with the user’s interest in **tech-driven growth**.
2. **Cost Efficiency**: Gross margin improved to **40.2%** in Q4 2025 , driven by **pricing strategies** and **favorable medical claims**. However, the **net loss margin** remains alarmingly high at **52.6%** .
3. **Risks**:
- **Impairment Charges**: A **$69M one-time hit** underscores asset write-downs.
- **Pipeline Concerns**: The sales cycle is **elongated**, with delayed project starts .
**Conclusion**: RGP’s strategic adjustments are **too early to validate**, but the **focus on high-margin services** could align with the user’s tech-centric investment thesis.
---
### 🎯 Final Take for Tech-Investors
- **For Growth**: RGP’s pivot to **digital consulting** and **CFO advisory** could tap into **tech-driven demand** for corporate efficiency.
- **For Value**: The **low P/S and P/B ratios** offer a **discounted entry point**, but the **negative P/E** and **high net loss** require a **long-term horizon**.
- **Risks**: Be cautious of **execution risks** (e.g., pipeline delays) and **operational inefficiencies**.
**Final Rating**: **Hold** with a **speculative upside** for long-term tech investors.