RGP
Resources Connection, Inc.
$4.42
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 68.8% below fair value
You pay
$4.42
Bear
$11.33
Fair
$14.16
Bull
$17.00
Bear
$11.33
+156.3%
$0.97 × 12x P/E
Fair
$14.16
+220.4%
$0.97 × 15x P/E
Bull
$17.00
+284.5%
$0.97 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
4.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $13.00 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $14.16 per share.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples