Resources Connection (RGP) posted another year of unprofitability, with losses having grown at a rapid 55.1% per year over the last five years. Looking ahead, analysts expect RGP to swing to profitability within the next three years. They project annual earnings growth of 134.11% per year, while revenue is forecast to rise at a modest 1.8% per year, trailing the broader US market's 9.9% pace. With margins showing little sign of improvement so far, investors face a market focused on the company’s turnaround potential.

See our full analysis for Resources Connection.

Let’s see how these earnings stack up against the prevailing narratives for RGP, and whether the latest numbers challenge or reinforce the story so far.

See what the community is saying about Resources Connection

• Client demand for digital transformation, data modernization, and AI-related consulting is fueling higher-value contracts, which has helped increase average bill rates and gross margin, according to the analysts' consensus view.

  • Consensus narrative emphasizes the pivot away from staffing-only to advisory and transformation-focused engagements, supporting longer-term margin improvement as clients embrace technology and integrated data systems.

  • Expansion into international markets, especially Europe and Asia Pacific, is adding revenue diversification and improving resilience, offsetting some of the weakness seen in U.S.-centric consulting revenue.

• The company's move toward tech-enabled delivery platforms and operational scalability is expected to boost efficiency and lift profit margins from -34.8% today to 4.5% in three years if execution stays on track.

  • Consistent with the consensus narrative, analysts are projecting annual earnings growth of 134.11% per year with future earnings reaching $27.8 million by 2028, illustrating the scale of the anticipated turnaround.

  • Strategic investments in automation and offshore centers may help the company close the efficiency gap with tech-forward competitors over the medium term.

• What’s surprising is that despite these positive catalysts, persistent revenue declines, down 14% in Consulting and 16% in On-Demand year-over-year, and a $69 million goodwill impairment underscore the tension between growth ambitions and current fundamentals in the consensus narrative.

  • Analysts caution that U.S. consulting revenue is expected to contract another 14% on a constant-currency basis, raising questions about the speed of any turnaround and the durability of higher-margin contracts relative to ongoing market headwinds.

  • The consensus narrative notes that lengthening deal cycles, abandoned deals, and clients pausing new projects could weigh on both topline and utilization rates, challenging the thesis that simply pivoting to digital or advisory services guarantees margin recovery.

  The latest segment weaknesses put the consensus narrative to the test. See what analysts are saying in the full narrative for RGP. ? Read the full Resources Connection Consensus Narrative.