Resources Connection (NASDAQ:RGP) Downgraded by Zacks Research to Strong Sell

Key Points

• Zacks Research downgraded Resources Connection from a "hold" to a "strong sell," and Wall Street Zen also cut its rating to "sell," though the consensus rating remains "Hold" with a $7.00 target.
• Quarterly results missed expectations—EPS of ($0.09) vs. ($0.05) estimated and slightly below revenue—while the company shows a negative net margin (20.16%) and negative return on equity; shares trade around $3.77 with a $129.4M market cap.
• Institutional ownership is very high (93.23%), with major holders like Vanguard, Charles Schwab and Brandes increasing positions recently.

Resources Connection (NASDAQ:RGP - Get Free Report) was downgraded by research analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a research report issued to clients and investors on Monday,Zacks.com reports.

Separately, Wall Street Zen cut Resources Connection from a "hold" rating to a "sell" rating in a research note on Saturday. Two investment analysts have rated the stock with a Buy rating and two have given a Sell rating to the company's stock. According to MarketBeat, Resources Connection presently has a consensus rating of "Hold" and a consensus target price of $7.00.

Resources Connection Price Performance

Shares of NASDAQ RGP opened at $3.77 on Monday. Resources Connection has a 1 year low of $3.06 and a 1 year high of $6.30. The stock has a market cap of $129.42 million, a P/E ratio of -1.27 and a beta of 0.45. The firm has a 50-day moving average of $3.76 and a 200 day moving average of $4.40.

Resources Connection (NASDAQ:RGP - Get Free Report) last announced its quarterly earnings data on Wednesday, April 8th. The company reported ($0.09) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.05) by ($0.04). The company had revenue of $107.93 million for the quarter, compared to analysts' expectations of $108.19 million. Resources Connection had a negative net margin of 20.16% and a negative return on equity of 0.55%.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of the business. Vanguard Group Inc. raised its holdings in shares of Resources Connection by 5.1% during the third quarter. Vanguard Group Inc. now owns 2,011,147 shares of the company's stock valued at $10,156,000 after purchasing an additional 97,228 shares during the last quarter. Brandes Investment Partners LP raised its holdings in shares of Resources Connection by 3.1% during the fourth quarter. Brandes Investment Partners LP now owns 1,442,645 shares of the company's stock valued at $7,271,000 after purchasing an additional 43,369 shares during the last quarter. Charles Schwab Investment Management Inc. raised its holdings in shares of Resources Connection by 37.1% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 1,407,032 shares of the company's stock valued at $7,091,000 after purchasing an additional 380,769 shares during the last quarter. Circumference Group LLC raised its holdings in shares of Resources Connection by 7.8% during the fourth quarter. Circumference Group LLC now owns 1,389,243 shares of the company's stock valued at $7,002,000 after purchasing an additional 100,000 shares during the last quarter. Finally, First Manhattan CO. LLC. purchased a new position in shares of Resources Connection during the fourth quarter valued at approximately $3,785,000. Hedge funds and other institutional investors own 93.23% of the company's stock.

About Resources Connection

Resources Connection, Inc NASDAQ: RGP is a publicly traded professional services firm that specializes in providing independent consulting and project-based teams to help organizations manage critical business challenges. Operating under the RGP brand, the company connects highly skilled consultants with clients seeking support in areas such as finance and accounting, legal and risk management, supply chain optimization, technology implementation, and digital transformation.

RGP's consultants bring specific industry and functional expertise to engagements, working on a flexible basis that allows clients to scale resources up or down as needed.

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