Recon Technology (RCON) AI Stock Analysis

• Market Cap: $58.21M
• Dividend Yield: N/A
• Average Volume (3M): 14.50K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.85
• Revenue Growth: -2.48%
• EPS Growth: 83.11%
• Country: US
• Employees: 184
• Sector: Energy
• Sector Strength: 42
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): -0.57
• Shares Outstanding: 7,987,959
• 10 Day Avg. Volume: 16,422
• 30 Day Avg. Volume: 14,497
• PEG Ratio: -0.05
• Price to Book (P/B): 0.19
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -8.23
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 1

Recon Technology's overall stock score is moderate. The company's strong equity position is overshadowed by significant operational challenges, as evidenced by consistent net losses and negative cash flows. Despite this, the technical indicators provide some optimism with a positive price trend. However, the poor valuation and lack of earnings call or corporate events data leave uncertainties in the long-term outlook.

Positive Factors

Business Growth

A significant increase in oilfield services business is expected.

Financial Performance

Gross profit margin expanded to 31.7%, reflecting more sales of higher-margin automation products and software.

Negative Factors

Customer Concentration

A high level of customer concentration poses a risk, with major clients accounting for a large portion of revenue.

Regulatory Challenges

Revenue from oilfield environmental protection work declined due to the expiration of a hazardous waste handling permit for one of RCON's subsidiaries.

Revenue Diversification Risks

Potential risk of delays diversifying revenue from oilfield services to plastics recycling and downstream businesses.

Recon Technology Business Overview & Revenue Model

Company Description

Recon Technology, Ltd. provides hardware, software, and on-site services to companies in the petroleum mining and extraction industry in the People's Republic of China. The company offers equipment, tools, and other hardware related to oilfield production and management, and transportation; and develops and sells industrial automation control and information solutions. It also provides equipment for oil and gas production and transportation, including heating furnaces and burner, as well as enhancing techniques comprising packers of fracturing; production packers; sand prevention in oil and water wells; water locating and plugging techniques; fissure shaper; fracture acidizing techniques; and electronic broken-down services to resolve block-up and freezing problems. In addition, the company offers automation systems and services, including pumping unit controller that monitors the pumping units and collects data; RTU to monitor natural gas wells and collect gas well pressure data; wireless dynamometers and wireless pressure gauges; electric multi-way valves for oilfield metering station flow control; and natural gas flow computer systems. Further, it provides Recon SCADA oilfield monitor and data acquisition system for supervision and data collection; EPC service of pipeline SCADA system for pipeline monitoring and data acquisition; EPC service of oil and gas wells SCADA system for monitoring and data acquisition of oil wells and natural gas wells; EPC service of oilfield video surveillance and control system to control the oil and gas wellhead and measurement station areas; and technique service for digital oilfield transformation. Additionally, the company offers oilfield waste water treatment solutions and related chemicals; and oily sludge disposal solutions. Recon Technology, Ltd. was incorporated in 2007 and is headquartered in Beijing, the People's Republic of China.

How the Company Makes Money

Recon Technology generates revenue primarily through the sale of its automation equipment and software services to oil and gas companies. The company provides customized solutions that include hardware and software integration to improve operational efficiency in oil extraction and management. Revenue streams are also bolstered by technical support services, maintenance contracts, and consulting services offered to its clients. Strategic partnerships with leading oil companies in China and collaborations with technology providers enhance its ability to deliver comprehensive solutions, contributing significantly to its earnings.

Recon Technology Financial Statement Overview

Summary

Recon Technology faces considerable financial challenges, primarily driven by consistent net losses and negative cash flows. While the balance sheet remains robust, reflecting strong equity, the income statement and cash flow statement suggest operational inefficiencies. The company needs strategic measures to enhance revenue and manage costs effectively to improve financial health.

Income Statement

The income statement reveals a declining trend in revenue over the years, with a slight increase in the most recent period. Gross profit margins have been inconsistent, and the company continues to operate at a net loss, affecting net profit margin negatively. The EBIT and EBITDA margins are also negative, reflecting operational challenges.

Balance Sheet

The balance sheet shows a strong equity position with a relatively low debt-to-equity ratio, indicating financial stability. However, the return on equity (ROE) is concerning due to negative net income. The equity ratio is robust, suggesting good asset coverage by equity.

Cash Flow

Cash flows highlight significant negative operating cash flow, posing liquidity challenges. Free cash flow remains negative, reflecting insufficient cash generation from operations. The operating cash flow to net income ratio is problematic due to negative cash flows and net income.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
68.85M	67.11M	83.78M	47.94M	65.12M
	Gross Profit
20.88M	18.87M	19.42M	7.22M	19.61M
	EBIT
-71.64M	-69.33M	-82.30M	-60.45M	-18.97M
	EBITDA
-50.37M	-52.01M	101.68M	-57.66M	-18.57M
	Net Income Common Stockholders
-49.87M	-59.17M	95.59M	-25.87M	-20.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
198.08M	288.31M	316.97M	344.00M	30.34M
	Total Assets
552.39M	531.82M	490.24M	566.52M	194.41M
	Total Debt
40.14M	35.56M	31.60M	42.63M	30.72M
	Net Debt
-69.85M	-68.56M	-285.38M	-301.37M	379.90K
	Total Liabilities
61.46M	92.67M	77.36M	279.00M	73.77M
	Stockholders Equity
502.55M	449.21M	420.63M	295.10M	110.03M
Cash Flow		Free Cash Flow
-43.75M	-52.63M	-26.94M	-34.57M	-9.10M
	Operating Cash Flow
-43.75M	-51.69M	-26.25M	-34.05M	-5.23M
	Investing Cash Flow
2.98M	-245.22M	-328.68K	-46.54M	-2.11M
	Financing Cash Flow
45.02M	56.38M	-10.00M	394.03M	33.24M

Recon Technology Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCON, the sentiment is Positive. The current price of 2 is above the 20-day moving average (MA) of 1.84, above the 50-day MA of 1.72, and below the 200-day MA of 2.26, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 57.86 is Neutral, neither overbought nor oversold. The STOCH value of 83.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RCON.

Recon Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NCSM	80 Outperform	$80.60M	9.96	8.71%	―	18.03%	-39.52%
DTI	64 Neutral	$87.56M	26.47	-1.66%	―	8.19%	-110.61%
Sector *	57 Neutral	$7.13B	3.45	-3.67%	5.68%	0.46%	-50.35%
RCON	54 Neutral	$58.21M	―	-10.48%	―	-2.48%	83.11%
DWSN	45 Neutral	$39.44M	―	-39.40%	―	-40.77%	-14.13%
NINE	42 Neutral	$23.81M	―	73.91%	―	-4.38%	-3.77%
KLXE	42 Neutral	$36.34M	―	-375.26%	―	-16.38%	-359.80%