RF Capital Group (RCG) AI Stock Analysis

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TSE:RCG Dividends

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RF Capital Group

(OTC:RCG)

56Neutral

RF Capital Group's overall stock score is influenced by strong financial recovery and strategic corporate moves, but is tempered by bearish technical signals and unattractive valuation metrics. Continued focus on operational efficiency and mitigating advisor attrition will be important for future performance.

RF Capital Group (RCG) vs. S&P 500 (SPY)

Market Cap

C$128.18M

Dividend YieldN/A

Average Volume (3M)3.79K

Price to Earnings (P/E)―

Beta (1Y)0.80

Revenue Growth4.65%

EPS Growth80.44%

CountryCA

Employees843

SectorFinancial

Sector Strength81

IndustryAsset Management

Share Statistics

EPS (TTM)-0.24

Shares Outstanding15,722,926

10 Day Avg. Volume5,051

30 Day Avg. Volume3,790

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.44

Price to Cash Flow (P/CF)2.80

P/FCF Ratio2.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

RF Capital Group Business Overview & Revenue Model

Company DescriptionRF Capital Group (RCG) is a Canadian-based financial services firm primarily focused on wealth management and investment advisory services. The company operates through its subsidiary, Richardson Wealth, catering to high-net-worth individuals and families. RCG aims to deliver a comprehensive suite of financial solutions, including portfolio management, financial planning, and investment strategy guidance.

How the Company Makes MoneyRF Capital Group makes money through several revenue streams, primarily driven by its wealth management and investment advisory services. The company's revenue model includes management fees charged based on assets under management (AUM), which fluctuate with the market value of client portfolios. Additionally, RCG earns income from trading commissions, advisory fees, and other service-related charges. Strategic partnerships and collaborations within the financial sector also contribute to its earnings by enhancing its service offerings and expanding its client base.

RF Capital Group Financial Statement Overview

Summary

RF Capital Group's financial performance shows a positive turnaround with strong revenue and profit growth, improved margins, and healthier cash flow. The balance sheet remains stable with moderate leverage, but there is room for enhancing equity returns. Continued focus on operational efficiency and cash flow stability will be crucial for sustaining growth.

Income Statement

Positive

RF Capital Group has demonstrated a strong revenue growth trajectory with a 6.52% increase from 2023 to 2024. Gross profit margin improved from 50.21% in 2023 to 57.69% in 2024, indicating efficient cost management. The net profit margin turned positive at 0.15% in 2024 from a negative 3.43% in 2023, showcasing a turnaround in profitability. However, the EBIT margin was 0%, reflecting challenges in achieving operational efficiency, and the EBITDA margin slightly declined to 15.52% from 14.60% in 2023.

Balance Sheet

Positive

The company's balance sheet shows a stable equity base with a debt-to-equity ratio of 0.49, demonstrating moderate leverage. Return on equity improved but remained low at 0.17%, indicating limited profitability relative to equity. The equity ratio decreased to 22.42% from 23.96% in 2023, suggesting a slight increase in leverage. Overall, the balance sheet indicates moderate financial risk with room for improvement in equity utilization.

Cash Flow

Positive

RF Capital Group showed a strong recovery in free cash flow from negative $273.68 million in 2023 to positive $20.91 million in 2024, indicating improved cash generation. The operating cash flow to net income ratio is robust at 41.82, reflecting effective conversion of revenue into cash. The free cash flow to net income ratio of 36.82 highlights efficient cash flow management, though the historical volatility in cash flow remains a concern.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
369.33M	346.75M	353.97M	321.79M	80.53M
	Gross Profit
213.09M	174.07M	204.22M	179.18M	56.81M
	EBIT
0.00	23.21M	24.95M	-2.17M	47.32M
	EBITDA
57.34M	50.62M	53.02M	22.64M	53.06M
	Net Income Common Stockholders
568.00K	-11.89M	-4.80M	-20.15M	28.75M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
90.15M	80.83M	367.85M	518.10M	556.25M
	Total Assets
1.46B	1.38B	1.70B	2.22B	2.12B
	Total Debt
160.36M	170.60M	142.95M	117.37M	137.66M
	Net Debt
71.81M	89.77M	-224.90M	-400.73M	-418.58M
	Total Liabilities
1.13B	1.05B	1.35B	1.86B	1.74B
	Stockholders Equity
326.98M	330.54M	346.92M	354.89M	379.86M
Cash Flow		Free Cash Flow
20.91M	-273.68M	-136.44M	-23.54M	3.04M
	Operating Cash Flow
23.75M	-268.50M	-107.40M	-14.21M	5.38M
	Investing Cash Flow
-2.85M	-5.19M	-29.04M	-9.34M	83.89M
	Financing Cash Flow
-13.18M	-13.34M	-13.80M	-14.64M	-50.00M

RF Capital Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price8.76

Price Trends

50DMA

10.42

Negative

100DMA

9.17

Positive

200DMA

8.36

Positive

Market Momentum

MACD

-0.18

Positive

RSI

34.40

Neutral

STOCH

46.22

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RCG, the sentiment is Negative. The current price of 8.76 is below the 20-day moving average (MA) of 10.01, below the 50-day MA of 10.42, and above the 200-day MA of 8.36, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 34.40 is Neutral, neither overbought nor oversold. The STOCH value of 46.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:RCG.

RF Capital Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IAG	74 Outperform	C$12.28B	13.42	13.26%	2.65%	-17.69%	29.19%
BAM	69 Neutral	C$118.90B	41.11	20.07%	3.12%	27.17%	16.13%
Sector *	63 Neutral	$12.33B	9.59	8.02%	79.26%	12.87%	-4.61%
FSZ	58 Neutral	C$675.68M	26.78	8.22%	13.68%	5.64%	-57.76%
RCG	56 Neutral	C$128.18M	―	0.16%	―	4.65%	80.44%
LB	54 Neutral	$1.19B	―	-0.24%	7.02%	-3.68%	-111.41%
CIX	51 Neutral	$4.50B	―	-55.59%	2.56%	3.21%	-9107.07%

* Financial Sector Average

Performance Comparison

TSE:RCG

RF Capital Group

8.87

2.05

30.06%

TSE:LB

Laurentian Bank

26.90

2.73

11.29%

TSE:CIX

CI Financial

31.23

15.68

100.82%

TSE:FSZ

Fiera Capital A

6.25

-0.03

-0.48%

TSE:IAG

iA Financial Corporation Inc

131.67

49.44

60.12%

TSE:BAM

Brookfield Asset Management Ltd. Class A

72.62

20.15

38.40%

RF Capital Group Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -16.81% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture, with notable revenue and asset growth, successful recruitment, and positive employee engagement. However, these were offset by significant declines in interest income and adjusted EBITDA, onetime leadership transition costs, and the departure of advisory teams.

Highlights

Increase in Revenue

For the third quarter of 2024, RF Capital reported $91.9 million in revenue, an increase of 5% compared to the third quarter of 2023.

Growth in Fee Revenue

Fee revenue, the largest component of RF Capital's revenue, increased by 7% compared to Q3 2023, driven by an increase in Assets Under Administration (AUA).

Positive Employee Engagement

For the 7th consecutive year, RF Capital was certified as a great place to work, with 87% of participants expressing pride in their workplace, up from 84% last year.

Strong Recruiting Pipeline

RF Capital's recruiting pipeline stands at over $29 billion, with successful recruitment of several high-profile teams in the last quarter.

Increase in Assets

RF Capital's assets increased by $3.8 billion since the beginning of the year, with an additional $400 million growth in October.

Lowlights

Decline in Interest Income

Interest income declined by 18% due to lower client cash balances, continuing a trend from the past two quarters.

Decrease in Adjusted EBITDA

Adjusted EBITDA was $12.5 million in Q3 2024, a decrease from $16.9 million in Q3 2023, due to higher operating expenses.

Two Team Departures

Two advisory teams with assets under management of approximately $456 million departed during the quarter.

Onetime Leadership Transition Costs

RF Capital incurred onetime costs related to leadership transitions, impacting operating expenses and resulting in a decrease in cash flow available for growth.

Company Guidance

During the third quarter 2024 earnings call for RF Capital, several key metrics and future guidance were highlighted. The company's assets under management increased by $3.8 billion since the start of the year, with an additional $400 million growth in October alone. Fee-based revenues reached $204.5 million for the nine months ending September 30, 2024, marking a 6% increase compared to the same period last year. However, adjusted EBITDA showed a decline, recording $41.1 million for the nine-month period, down 9% from the previous year. The adjusted net income stood at $6.5 million, up by $2.9 million year-over-year. The recruiting pipeline was robust, with assets over $29 billion in view. Looking ahead, the company expects AUA to align with equity market returns and recruiting activity, while interest revenue is projected to decline with lower benchmark rates. Meanwhile, operating expenses are expected to remain under control, with cash flow primarily directed towards expanding the advisor network.

RF Capital Group Corporate Events

Shareholder MeetingsFinancial Disclosures

RF Capital Group to Announce Q1 2025 Results and Host Annual Meeting

Neutral

Apr 1, 2025

RF Capital Group Inc. announced it will release its first quarter 2025 financial results on April 30, 2025, and host its annual shareholder meeting on May 1, 2025, in Toronto. The company is promoting electronic delivery of its meeting materials to reduce environmental impact and costs, reflecting its commitment to sustainability. The meeting will include discussions on financial and strategic highlights, with a live webcast available for broader access.

Executive/Board ChangesBusiness Operations and Strategy

Richardson Wealth Appoints Kevin Shubley to Enhance Advisory Growth

Positive

Mar 26, 2025

Richardson Wealth Limited, a subsidiary of RF Capital Group Inc., has appointed Kevin Shubley as SVP, Head of Advisory Experience and Growth. With over 20 years of experience, Shubley will oversee various strategic areas to enhance advisory practices and client service. This move aligns with Richardson Wealth’s mission to be a top destination for Canada’s leading advisors and their clients, reinforcing its commitment to operational excellence and superior client advice.

Business Operations and StrategyFinancial Disclosures

RF Capital Group Sees Revenue Growth Amid Market Strength

Positive

Feb 27, 2025

RF Capital Group reported a 5% increase in revenue for fiscal 2024, reaching $369.3 million, primarily driven by a 12% growth in assets under administration (AUA). Despite a decline in interest revenue, the company saw a significant rise in fee revenue, which helped offset increased operating expenses. The company’s net income improved from a loss to a profit, and free cash flow turned positive, indicating improved financial health. However, adjusted EBITDA decreased by 4% due to higher operating expenses. The company’s performance reflects strong equity markets and successful recruitment efforts, although advisor attrition remains a challenge.

Financial Disclosures

RF Capital to Announce Q4 and Fiscal 2024 Results

Neutral

Jan 28, 2025

RF Capital Group Inc. announced that it will release its financial results for the fourth quarter and fiscal year 2024 on February 27, 2025. The results will be followed by an earnings conference call and webcast on February 28, led by the company’s CEO, Dave Kelly. This announcement provides stakeholders with an opportunity to assess the company’s financial performance and strategy moving forward.

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.