Reckon Limited (RKN) AI Stock Analysis

• Market Cap: €56.07M
• Dividend Yield: 6.56%
• Average Volume (3M): 45.42K
• Price to Earnings (P/E): 12.7
• Beta (1Y): -0.37
• Revenue Growth: 1.32%
• EPS Growth: -21.53%
• Country: AU
• Employees: 180
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 0.04
• Shares Outstanding: 113,294,830
• 10 Day Avg. Volume: 80,035
• 30 Day Avg. Volume: 45,424
• PEG Ratio: -1.44
• Price to Book (P/B): 2.59
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.26
• 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: €0.58
• Price Target Upside: 15.35% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 71 Outperform
• Price Target: AU$0.50 ▲(0.00%Upside)

Reckon Limited presents a strong financial position with robust cash flow and operational efficiency, contributing significantly to its overall score. The valuation is attractive, supported by a low P/E ratio and high dividend yield. Technical analysis indicates neutral momentum, suggesting stability in stock price. The absence of notable earnings call highlights or corporate events has no impact on the score.

Reckon Limited Business Overview & Revenue Model

Company Description

Reckon Limited provides software solutions in Australia, the United States, and internationally. The company operates through three divisions: Business Group; Practice Management Group, Accountants; and Practice Management Group, Legal. It offers Reckon One, an online accounting software for small businesses; Single Touch Payroll software for managing pay runs, allowances, leave, and superannuation; Reckon Accounts Hosted, an online accounting software to manage finances, payroll, and inventory for large businesses; Reckon Cloud POS, a cloud-based point of sale software; and Better Clinics, an online practice management software for allied health professionals. The company also provides Reckon Loans, which offers business loans; Reckon Accounts Desktop, a desktop accounting software for businesses; Desktop Point of Sale software; personal finance software; Reckon APS, an accounting practice management software; and Reckon Elite, a small and medium firms practice management software. In addition, it delivers digitalization, practice management, and cost recovery and analytics solutions under the nQ Zebraworks brand primarily to the law firms, and government and corporate legal departments. The company was incorporated in 1987 and is based in North Sydney, Australia.

How the Company Makes Money

Reckon Limited makes money primarily through subscription-based revenue models, where customers pay recurring fees to access its software solutions. The company's key revenue streams include its accounting software for small businesses and practice management software for accountants. Additionally, Reckon generates income from providing payroll solutions and other financial services. Significant partnerships with professional accounting bodies and businesses enhance its market reach and contribute to its earnings. By continually updating its software products and expanding its service offerings, Reckon maintains a steady flow of revenue from both existing clients and new customers.

Reckon Limited Financial Statement Overview

Summary

Overall, Reckon Limited demonstrates solid financial health with strong revenue growth, operational efficiency, and robust cash flow generation. Despite a decline in net profit margin and ROE, the company maintains a healthy balance sheet with moderate leverage and solid equity. The software industry positioning supports its growth trajectory, though it should focus on improving net income to enhance profitability further.

Income Statement

Reckon Limited demonstrates a positive revenue growth trend with a 1.32% increase from 2023 to 2024. The gross profit margin improved significantly, reaching 50.92% in 2024. However, net profit margin decreased to 8.17% in 2024 due to a lower net income. EBIT and EBITDA margins are healthy at 16.95% and 9.15% respectively, showcasing operational efficiency.

Balance Sheet

The company maintains a manageable debt-to-equity ratio of 0.31, indicating moderate leverage. The equity ratio stands at 47.95%, reflecting a solid equity base. However, return on equity (ROE) declined to 19.87% in 2024, suggesting reduced profitability on shareholders' investments.

Cash Flow

Reckon Limited exhibits strong cash flow management with a significant free cash flow of 17.53 million and a remarkable free cash flow growth rate of 280.63% from 2023 to 2024. The operating cash flow to net income ratio is robust at 4.05, indicating efficient conversion of income into cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
54.04M	53.41M	51.23M	49.52M	65.42M
	Gross Profit
27.48M	13.50M	13.50M	13.87M	15.19M
	EBIT
4.46M	5.34M	5.30M	6.23M	5.62M
	EBITDA
20.19M	19.70M	17.96M	17.26M	29.74M
	Net Income Common Stockholders
4.42M	5.57M	7.31M	9.82M	9.74M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
986.00K	975.00K	1.23M	1.39M	1.13M
	Total Assets
46.40M	41.21M	39.94M	71.87M	83.04M
	Total Debt
6.96M	5.20M	6.49M	21.14M	38.41M
	Net Debt
5.98M	4.23M	5.26M	19.75M	37.27M
	Total Liabilities
23.78M	21.58M	22.03M	40.05M	57.66M
	Stockholders Equity
22.25M	19.57M	17.14M	30.53M	25.38M
Cash Flow		Free Cash Flow
17.53M	4.61M	7.47M	10.05M	12.42M
	Operating Cash Flow
17.89M	19.13M	7.69M	10.79M	12.91M
	Investing Cash Flow
-14.82M	-15.29M	78.17M	12.90M	568.00K
	Financing Cash Flow
-3.08M	-4.11M	-85.93M	-23.46M	-13.46M

Reckon Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.50
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:RKN, the sentiment is Negative. The current price of 0.5 is above the 20-day moving average (MA) of 0.50, above the 50-day MA of 0.49, and below the 200-day MA of 0.53, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 50.26 is Neutral, neither overbought nor oversold. The STOCH value of 56.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:RKN.

Reckon Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RKN	71 Outperform	€56.07M	12.69	21.21%	6.56%	1.32%	-21.53%
Sector *	62 Neutral	$11.93B	10.60	-7.51%	3.00%	7.40%	-8.09%
NXDCF		$5.77B	―	-2.06%	―	―	―
RW8		€7.86B	96.12	37.44%	0.61%	―	―
WTCHF		$23.33B	115.70	13.73%	0.12%	―	―
XROLF		$19.16B	138.44	12.98%	―	―	―

Reckon Limited Corporate Events

Reckon Limited Director Increases Shareholding

Reckon Limited announced a change in the director’s interest, as Samuel Allert, a director, increased his direct holding of company securities by acquiring 80,000 shares through an on-market trade. This transaction, executed at $0.4975 per share, raises Allert’s total holdings to 1,017,779 shares. This move may reflect the director’s confidence in the company’s future prospects and could influence stakeholder perceptions positively.

The most recent analyst rating on (AU:RKN) stock is a Hold with a A$0.65 price target. To see the full list of analyst forecasts on Reckon Limited stock, see the AU:RKN Stock Forecast page.

Reckon Limited Secures Strong Shareholder Support at AGM

Reckon Limited announced that all resolutions at its Annual General Meeting were passed, including the re-election of Clive Rabie as a director and the adoption of the Remuneration Report. The results indicate strong shareholder support, with over 95% voting in favor of the re-election and over 99% supporting the remuneration report. This outcome reflects positively on the company’s governance and strategic direction, potentially strengthening its position in the software industry.

The most recent analyst rating on (AU:RKN) stock is a Hold with a A$0.65 price target. To see the full list of analyst forecasts on Reckon Limited stock, see the AU:RKN Stock Forecast page.

Reckon Limited Schedules 2025 Annual General Meeting

Reckon Limited has announced its Annual General Meeting (AGM) scheduled for May 14, 2025, where key agenda items include the re-election of Clive Rabie as a director and a non-binding vote on the Remuneration Report. These discussions and resolutions are part of the company’s ongoing governance and shareholder engagement efforts, reflecting its commitment to transparency and accountability in its operations.