20.2 USD
-0.1 (-0.47%)
We assign a fundamental rating of 6 out of 10 to RCMT. RCMT was compared to 88 industry peers in the Professional Services industry. RCMT scores excellent on profitability, but there are some minor concerns on its financial health. RCMT scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make RCMT suitable for value investing!
1. Profitability
1.1 Basic Checks
- In the past year RCMT was profitable.
- RCMT had a positive operating cash flow in the past year.
- RCMT had positive earnings in 4 of the past 5 years.
- In the past 5 years RCMT always reported a positive cash flow from operatings.
1.2 Ratios
- RCMT has a Return On Assets of 10.09%. This is amongst the best in the industry. RCMT outperforms 80.68% of its industry peers.
- The Return On Equity of RCMT (31.65%) is better than 88.64% of its industry peers.
- The Return On Invested Capital of RCMT (19.24%) is better than 88.64% of its industry peers.
- RCMT had an Average Return On Invested Capital over the past 3 years of 29.36%. This is significantly above the industry average of 11.85%.
- The 3 year average ROIC (29.36%) for RCMT is well above the current ROIC(19.24%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.09% | ||
| ROE | 31.65% | ||
| ROIC | 19.24% |
ROA(3y)15.94%
ROA(5y)9.97%
ROE(3y)56.79%
ROE(5y)34.52%
ROIC(3y)29.36%
ROIC(5y)N/A
1.3 Margins
- RCMT's Profit Margin of 4.23% is in line compared to the rest of the industry. RCMT outperforms 59.09% of its industry peers.
- In the last couple of years the Profit Margin of RCMT has grown nicely.
- The Operating Margin of RCMT (7.16%) is better than 60.23% of its industry peers.
- In the last couple of years the Operating Margin of RCMT has grown nicely.
- With a Gross Margin value of 27.51%, RCMT is not doing good in the industry: 60.23% of the companies in the same industry are doing better.
- In the last couple of years the Gross Margin of RCMT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.16% | ||
| PM (TTM) | 4.23% | ||
| GM | 27.51% |
OM growth 3Y15.64%
OM growth 5Y17.04%
PM growth 3Y-3.9%
PM growth 5Y17.41%
GM growth 3Y3.24%
GM growth 5Y2.42%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), RCMT is creating value.
- RCMT has less shares outstanding than it did 1 year ago.
- RCMT has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, RCMT has a worse debt to assets ratio.
2.2 Solvency
- RCMT has an Altman-Z score of 4.45. This indicates that RCMT is financially healthy and has little risk of bankruptcy at the moment.
- RCMT's Altman-Z score of 4.45 is amongst the best of the industry. RCMT outperforms 81.82% of its industry peers.
- The Debt to FCF ratio of RCMT is 9.42, which is on the high side as it means it would take RCMT, 9.42 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 9.42, RCMT perfoms like the industry average, outperforming 46.59% of the companies in the same industry.
- RCMT has a Debt/Equity ratio of 0.78. This is a neutral value indicating RCMT is somewhat dependend on debt financing.
- RCMT has a Debt to Equity ratio (0.78) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 9.42 | ||
| Altman-Z | 4.45 |
ROIC/WACC2.38
WACC8.07%
2.3 Liquidity
- A Current Ratio of 1.98 indicates that RCMT should not have too much problems paying its short term obligations.
- RCMT has a Current ratio of 1.98. This is in the better half of the industry: RCMT outperforms 72.73% of its industry peers.
- RCMT has a Quick Ratio of 1.98. This is a normal value and indicates that RCMT is financially healthy and should not expect problems in meeting its short term obligations.
- RCMT has a better Quick ratio (1.98) than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.98 | ||
| Quick Ratio | 1.98 |
3. Growth
3.1 Past
- RCMT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.59%.
- The Earnings Per Share has been growing by 39.16% on average over the past years. This is a very strong growth
- The Revenue has grown by 13.70% in the past year. This is quite good.
- Measured over the past years, RCMT shows a small growth in Revenue. The Revenue has been growing by 7.81% on average per year.
EPS 1Y (TTM)3.59%
EPS 3Y25.74%
EPS 5Y39.16%
EPS Q2Q%20%
Revenue 1Y (TTM)13.7%
Revenue growth 3Y10.94%
Revenue growth 5Y7.81%
Sales Q2Q%16.44%
3.2 Future
- Based on estimates for the next years, RCMT will show a very strong growth in Earnings Per Share. The EPS will grow by 25.17% on average per year.
- The Revenue is expected to grow by 9.99% on average over the next years. This is quite good.
EPS Next Y41.4%
EPS Next 2Y25.17%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year13.15%
Revenue Next 2Y9.99%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 10.00 indicates a reasonable valuation of RCMT.
- RCMT's Price/Earnings ratio is rather cheap when compared to the industry. RCMT is cheaper than 86.36% of the companies in the same industry.
- When comparing the Price/Earnings ratio of RCMT to the average of the S&P500 Index (27.21), we can say RCMT is valued rather cheaply.
- With a Price/Forward Earnings ratio of 7.72, the valuation of RCMT can be described as very cheap.
- 89.77% of the companies in the same industry are more expensive than RCMT, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, RCMT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10 | ||
| Fwd PE | 7.72 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, RCMT is valued cheaper than 84.09% of the companies in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as RCMT.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.74 | ||
| EV/EBITDA | 7.4 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- RCMT has an outstanding profitability rating, which may justify a higher PE ratio.
- RCMT's earnings are expected to grow with 25.17% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.24
PEG (5Y)0.26
EPS Next 2Y25.17%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- RCMT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
RCM TECHNOLOGIES INC / RCMT FAQ
Can you provide the ChartMill fundamental rating for RCM TECHNOLOGIES INC?
ChartMill assigns a fundamental rating of 6 / 10 to RCMT.
What is the valuation status of RCM TECHNOLOGIES INC (RCMT) stock?
ChartMill assigns a valuation rating of 8 / 10 to RCM TECHNOLOGIES INC (RCMT). This can be considered as Undervalued.
What is the profitability of RCMT stock?
RCM TECHNOLOGIES INC (RCMT) has a profitability rating of 8 / 10.
What are the PE and PB ratios of RCM TECHNOLOGIES INC (RCMT) stock?
The Price/Earnings (PE) ratio for RCM TECHNOLOGIES INC (RCMT) is 10 and the Price/Book (PB) ratio is 3.62.
What is the expected EPS growth for RCM TECHNOLOGIES INC (RCMT) stock?
The Earnings per Share (EPS) of RCM TECHNOLOGIES INC (RCMT) is expected to grow by 41.4% in the next year.