Resources Connection Inc

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RECN : NASDAQ : Services
$13.35 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 111000.0
07/24/17 - 4:00 PM ET

Financial Analysis


RESOURCES CONNECTION INC's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. RESOURCES CONNECTION INC is extremely liquid. Currently, the Quick Ratio is 2.24 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 30.49% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)148.62152.52
EBITDA ($mil)9.6216.54
EBIT ($mil)8.6815.68
Net Income ($mil)4.448.68


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)62.33116.05
Total Assets ($mil)364.13422.24
Total Debt ($mil)0.00.0
Equity ($mil)238.14342.65


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin39.0539.93
EBITDA Margin6.4710.84
Operating Margin5.8410.28
Sales Turnover1.61.42
Return on Assets5.127.2
Return on Equity7.838.88
Debt Q4 FY16 Q4 FY15
Current Ratio0.03.2
Debt/Capital0.00.0
Interest Expense0.360.0
Interest Coverage24.230.0


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)29.6636.23
Div / share0.110.1
EPS0.150.23
Book value / share8.039.46
Institutional Own % n/a n/a
Avg Daily Volume105910.0153011.0

Valuation


HOLD. The current P/E ratio indicates a significant discount compared to an average of 38.31 for the Professional Services industry and a value on par with the S&P 500 average of 24.66. To use another comparison, its price-to-book ratio of 1.82 indicates a discount versus the S&P 500 average of 3.07 and a significant discount versus the industry average of 8.27. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, RESOURCES CONNECTION INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
RECN 26.64 Peers 38.31   RECN 15.37 Peers 20.12

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

RECN is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

RECN is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
RECN 17.03 Peers 21.09   RECN 7.20 Peers 0.95

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

RECN is trading at a discount to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

RECN trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
RECN 1.82 Peers 8.27   RECN -32.10 Peers 27.15

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

RECN is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, RECN is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
RECN 0.74 Peers 4.06   RECN -2.53 Peers 10.54

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

RECN is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

RECN significantly trails its peers on the basis of sales growth

 

 

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