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Rcm Technologies (RCMT)
NASDAQ:RCMT
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Rcm Technologies
(NASDAQ:RCMT)
58Neutral
Positive Factors
Business Expansion
New business pipelines are expanding for all segments, with Specialty Healthcare expected to support 15%+ revenue growth.
Financial Management
Cash improved in 4Q with lower DSO and is expected to improve further, indicating better financial management.
Negative Factors
Expenses
SG&A was 20.8% of revenue vs 18.9% a year ago and 18.7% in our model due to unusually high medical costs under RCMT’s self-insured plan as well as higher expense for a legal settlement.
Gross Profit
The 4Q gross profit was negatively impacted by a lower gross margin in Engineering Services due to a higher mix of lower margin engagements and one-time issues.
Rcm Technologies (RCMT) vs. S&P 500 (SPY)
Market Cap
$114.89M
Dividend YieldN/A
Average Volume (3M)52.97K
Price to Earnings (P/E)9.0
Beta (1Y)0.78
Revenue Growth5.75%
EPS Growth-15.87%
CountryUS
Employees3,370
SectorIndustrials
Sector Strength71
IndustryIndustrial Conglomerates
Share Statistics
EPS (TTM)1.68
Shares Outstanding7,588,577
10 Day Avg. Volume72,874
30 Day Avg. Volume52,968
Financial Highlights & Ratios
PEG Ratio1.07
Price to Book (P/B)N/A
Price to Sales (P/S)0.41
Price to Cash Flow (P/CF)-17.60
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$30.00Price Target Upside98.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Rcm Technologies Business Overview & Revenue Model
Company DescriptionRCM Technologies, Inc. engages in the provision of business and technology solutions. It operates through the following business segments: Engineering, Specialty Health Care, Information Technology, and Corporate. The Engineering segment comprises of engineering, design, engineering analysis, technical writing, and technical support services. The Specialty Health Care Services segment offers staffing of health care professionals. The Information Technology segment involves the enterprise business solutions, application services, infrastructure solutions, competitive advantage and productivity solutions, life sciences solutions, and other selected vertical market specific offerings. The company was founded by Leon Kopyt in 1971 and is headquartered in Pennsauken, NJ.
How the Company Makes MoneyRCM Technologies makes money primarily through its staffing and consulting services, generating revenue by providing skilled professionals and technical solutions to meet the unique needs of its clients. The company earns fees for contract staffing, direct placement, and managed service provider programs. In addition to staffing, RCM Technologies offers project-based consulting services, where it charges for delivering technology, engineering, and business solutions tailored to client specifications. Strategic partnerships and long-term client relationships play a crucial role in sustaining and growing its revenue streams, enabling RCM Technologies to maintain a steady flow of projects and engagements across various sectors.
Rcm Technologies Financial Statement Overview
Summary
Rcm Technologies demonstrates operational efficiency with strong EBIT and EBITDA margins, despite a decrease in revenue and net income. The balance sheet shows no leverage, possibly limiting growth potential, while cash flows remain positive, indicating adequate liquidity management.Income Statement
Rcm Technologies shows a stable gross profit margin and a positive EBIT margin in the TTM, with a slight decrease in net profit and revenue compared to the previous year. Despite this, the EBIT and EBITDA margins remain healthy, indicating operational efficiency.70
Positive
Balance Sheet
The balance sheet reveals a significant drop in stockholders' equity and no reported debt in the TTM, which indicates a zero debt-to-equity ratio. However, this could reflect a lack of financial leverage, potentially limiting growth. The equity ratio has decreased, impacting financial stability.45
Neutral
Cash Flow
The cash flow statement indicates a decline in free cash flow but a positive operating cash flow to net income ratio. While free cash flow has decreased, the company maintains a positive cash flow from operations, which is crucial for sustaining business operations.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 278.38M | 263.24M | 284.68M | 203.88M | 150.41M | Gross Profit |
| 79.78M | 76.70M | 82.93M | 53.12M | 38.85M | EBIT |
| 22.32M | 23.69M | 28.80M | 5.87M | 10.31M | EBITDA |
| 23.82M | 24.51M | 29.53M | 6.97M | -9.89M | Net Income Common Stockholders |
| 13.33M | 16.83M | 20.89M | 10.99M | -8.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.73M | 6.28M | 339.00K | 235.00K | 734.00K | Total Assets |
| 132.08M | 120.48M | 87.96M | 72.85M | 68.34M | Total Debt |
| 0.00 | 34.00M | 13.76M | 18.22M | 16.77M | Net Debt |
| -4.73M | 27.71M | 13.42M | 17.99M | 16.04M | Total Liabilities |
| 0.00 | 94.69M | 56.00M | 46.88M | 46.10M | Stockholders Equity |
| 0.00 | 25.79M | 31.96M | 25.97M | 22.24M |
| Cash Flow | Free Cash Flow | |||
| 6.17M | 9.55M | 27.55M | 347.00K | 24.74M | Operating Cash Flow |
| 6.17M | 12.48M | 28.44M | 915.00K | 25.20M | Investing Cash Flow |
| -2.57M | -2.54M | -4.98M | 6.29M | -419.00K | Financing Cash Flow |
| -4.83M | -3.85M | -23.13M | -7.55M | -25.63M |
Rcm Technologies Technical Analysis
Negative
15.14
Price Trends
18.82
Negative
20.76
Negative
20.18
Negative
Market Momentum
-1.15
Positive
31.39
Neutral
37.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCMT, the sentiment is Negative. The current price of 15.14 is below the 20-day moving average (MA) of 17.41, below the 50-day MA of 18.82, and below the 200-day MA of 20.18, indicating a bearish trend. The MACD of -1.15 indicates Positive momentum. The RSI at 31.39 is Neutral, neither overbought nor oversold. The STOCH value of 37.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RCMT.
Rcm Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $3.44B | 14.32 | 13.92% | 2.16% | -3.27% | 62.57% | |
71 Outperform | $863.95M | 102.77 | 1.91% | 1.42% | 7.15% | -83.77% | |
62 Neutral | $8.23B | 13.95 | 2.39% | 3.08% | 3.89% | -14.41% | |
60 Neutral | $5.43B | 21.76 | 16.96% | 4.10% | -9.33% | -37.06% | |
58 Neutral | $114.89M | 9.01 | 44.97% | ― | 5.75% | -15.87% | |
58 Neutral | $2.70B | 19.20 | 6.67% | 5.34% | -5.61% | 77.92% | |
44 Neutral | $169.63M | ― | -32.53% | ― | -17.78% | -820.48% |
* Industrials Sector Average
Performance Comparison
RCMT
Rcm Technologies
15.14
-6.87
-31.21%
HSII
Heidrick & Struggles
42.33
10.32
32.24%
KFY
Korn Ferry
66.60
3.70
5.88%
MAN
ManpowerGroup
57.68
-13.31
-18.75%
RHI
Robert Half
53.14
-22.64
-29.88%
TBI
Trueblue
5.71
-6.36
-52.69%
Rcm Technologies Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -15.13% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook. While there is strong momentum and growth in several business units and strategic initiatives, profitability issues in Q4 and increased expenses have impacted the overall financial performance. Optimism remains for 2025 with expectations of double-digit growth in adjusted EBITDA.Highlights
Strong Top Line Momentum and Strategic Growth
The fourth quarter demonstrated strong top line momentum as strategic initiatives gained traction. Despite Q4 profitability disappointment, the internal business structure is in good shape, showing growth in hours and increasing activity.
Health Care and School District Growth
RCM Health Care closed 2024 with resumption of growth in hours and deepening partnerships with school districts. The demand for behavioral health services in schools has surged, contributing significantly to growth.
Expansion in Corrections and Aerospace & Defense Sectors
The corrections sector saw impressive growth in 2024, with further expansion anticipated. Aerospace & Defense increased headcount by 20% in Q4 2024 over Q3, with significant increases in revenue and profit.
Managed Services and Engineering Growth
Managed service contract portfolio showed positive growth, exceeding GP and NOI targets. Energy Services exhibited robust annual growth, with significant projects and partnerships underway.
Lowlights
Profitability Disappointment in Q4
Q4 profitability was below expectations due to discrete items that impacted the quarter, including a canceled industrial process equipment order and significant rework needed in the Technical Publications group.
Increased SG&A Expenses
The self-insured medical plan incurred abnormally high medical costs, increasing SG&A expenses by about $1.25 million. A class action lawsuit settlement added approximately $450,000 in SG&A expenses.
Flat Consolidated Gross Profit and Reduced EBITDA
Consolidated gross profit for Q4 2024 was flat compared to Q4 2023. Adjusted EBITDA for Q4 2024 was $6.3 million, down from $8.9 million in Q4 2023.
Company Guidance
During the call, RCM Technologies provided guidance on its financial and operational performance for the fourth quarter and fiscal year 2024. The company reported a consolidated gross profit of $21.6 million for Q4 2024, flat compared to the same period in 2023, and $79.8 million for the full year, up from $76.7 million in 2023. Adjusted EBITDA for Q4 2024 was $6.3 million, down from $8.9 million in Q4 2023, while fiscal 2024 adjusted EBITDA was $25.9 million, slightly lower than $26.6 million in 2023. RCM's adjusted EPS was $2.03 for fiscal 2024, compared to $2.04 in the previous year. The company faced challenges, including a $900,000 reduction in gross profit due to a canceled industrial process equipment order and rework on a project, and increased SG&A expenses by $1.25 million due to high medical costs. Despite these setbacks, RCM aims for at least double-digit adjusted EBITDA growth in 2025, with expectations of a tax rate between 26% and 29%, significantly lower than the 34% in 2024. The company also highlighted strategic growth in various divisions, such as Energy Services and Aerospace & Defense, and a strong start to 2025 with school and corrections clients.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.