Upwork (NASDAQ:UPWK) vs. Resources Connection (NASDAQ:RGP) Financial Review

Upwork (NASDAQ:UPWK) and Resources Connection (NASDAQ:RGP) are both small-cap industrials companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, valuation and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings for Upwork and Resources Connection, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upwork	1	9	3	0	2.15
Resources Connection	1	1	2	0	2.25

Upwork currently has a consensus target price of $15.50, suggesting a potential upside of 60.29%. Resources Connection has a consensus target price of $7.00, suggesting a potential upside of 66.67%. Given Resources Connection’s stronger consensus rating and higher probable upside, analysts plainly believe Resources Connection is more favorable than Upwork.

Profitability

This table compares Upwork and Resources Connection’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Upwork	13.81%	17.92%	8.54%
Resources Connection	-8.98%	-4.63%	-3.16%

Risk & Volatility

Upwork has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Resources Connection has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Insider & Institutional Ownership

77.7% of Upwork shares are held by institutional investors. Comparatively, 93.2% of Resources Connection shares are held by institutional investors. 4.9% of Upwork shares are held by company insiders. Comparatively, 7.9% of Resources Connection shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Upwork and Resources Connection”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upwork	$787.78 million	1.52	$115.43 million	$0.81	11.94
Resources Connection	$452.01 million	0.32	-$40.60 million	($1.20)	-3.50

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

Summary

Upwork beats Resources Connection on 10 of the 14 factors compared between the two stocks.

About Upwork

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally. The company’s work marketplace provides access to talent with various skills across a range of categories, including administrative support, sales and marketing, design and creative, and customer service, as well as web, mobile, and software development. Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. The company’s work marketplace offers access to various functionalities for remote engagements with talent, including communication and collaboration, ability to receive talent invoices through their work marketplace, and payment protection. Its marketplace offerings include Upwork Payroll and Upwork Enterprise, as well as managed and escrow services. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in San Francisco, California.

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.