Analyzing Resources Connection (NASDAQ:RGP) and TCTM Kids IT Education (NASDAQ:VSA)

TCTM Kids IT Education (NASDAQ:VSA) and Resources Connection (NASDAQ:RGP) are both small-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Profitability

This table compares TCTM Kids IT Education and Resources Connection’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TCTM Kids IT Education	N/A	N/A	N/A
Resources Connection	-26.13%	0.62%	0.43%

Analyst Ratings

This is a breakdown of current recommendations for TCTM Kids IT Education and Resources Connection, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TCTM Kids IT Education	1	0	0	0	1.00
Resources Connection	2	0	2	0	2.00

Resources Connection has a consensus price target of $6.00, suggesting a potential upside of 28.48%. Given Resources Connection’s stronger consensus rating and higher possible upside, analysts plainly believe Resources Connection is more favorable than TCTM Kids IT Education.

Risk and Volatility

TCTM Kids IT Education has a beta of 0.1, indicating that its stock price is 90% less volatile than the S&P 500. Comparatively, Resources Connection has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Institutional and Insider Ownership

49.8% of TCTM Kids IT Education shares are owned by institutional investors. Comparatively, 93.2% of Resources Connection shares are owned by institutional investors. 32.9% of TCTM Kids IT Education shares are owned by insiders. Comparatively, 7.9% of Resources Connection shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares TCTM Kids IT Education and Resources Connection”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TCTM Kids IT Education	$160.41 million	0.02	-$80.36 million	($42.00)	-0.05
Resources Connection	$551.33 million	0.28	-$191.78 million	($4.02)	-1.16

TCTM Kids IT Education has higher earnings, but lower revenue than Resources Connection. Resources Connection is trading at a lower price-to-earnings ratio than TCTM Kids IT Education, indicating that it is currently the more affordable of the two stocks.

Summary

Resources Connection beats TCTM Kids IT Education on 10 of the 14 factors compared between the two stocks.

About TCTM Kids IT Education

Tarena International, Inc., through its subsidiaries, provides professional education services through full-time and part-time classes under the Tarena brand in the People’s Republic of China. It operates through two segments, Adult Professional Education and Childhood & Adolescent Quality Education Services. The company offers education courses in 7 information technology (IT) subjects, such as Java, software testing, Linux and network engineering, Big Data, Web front-end development, Python, and network engineer courses; and 3 non-IT subjects, including digital art, online sales and marketing, and visual effects-VFX, as well as live distance instruction, classroom-based tutoring, and online learning modules. It also provides 9 childhood and adolescent quality education programs, including robotics programming, graphical intelligent programming, NOI informatics Olympiad, Python artificial intelligence, high level hardware programming for secondary school, soft and hard programming enlightenment, creative programming starter, and SPIKE starter and advanced under the TongchengTongmei brand. In addition, the company offers online learning platform for education courses and job placement training courses. As of December 31, 2021, it had a network of 100 directly managed learning centers in 44 cities; and 238 TongchengTongmei standalone learning centers in 54 cities. The company was founded in 2002 and is headquartered in Beijing, the People’s Republic of China.

About Resources Connection

Resources Connection, Inc. provides consulting services to business customers under the Resources Global Professionals name in North America, Europe, and the Asia Pacific. The company offers services in the areas of transactions, including integration and divestitures, bankruptcy/restructuring, going public readiness and support, financial process optimization, and system implementation; and regulations, such as accounting regulations, internal audit and compliance, data privacy and security, healthcare compliance, and regulatory compliance. It provides transformations services comprising finance transformation, digital transformation, supply chain management, cloud migration, and data design and analytics. The company was formerly known as RC Transaction Corp. and changed its name to Resources Connection, Inc. in August 2000. Resources Connection, Inc. was founded in 1996 and is headquartered in Irvine, California.