Reckon Limited (RKN) AI Stock Analysis

• Market Cap: AU$65.70M
• Dividend Yield: 4.39%
• Average Volume (3M): 74.36K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.01
• Revenue Growth: 9.30%
• EPS Growth: 11.68%
• Country: AU
• Employees: 180
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.04
• Shares Outstanding: 113,294,830
• 10 Day Avg. Volume: 87,029
• 30 Day Avg. Volume: 74,356
• PEG Ratio: -0.74
• Price to Book (P/B): 3.04
• Price to Sales (P/S): 1.25
• P/FCF Ratio: 3.86
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: AU$0.50 ▼(-12.28% Downside)

Reckon Limited's overall stock score is driven by its solid financial performance and attractive valuation. The company's strong cash flow and moderate leverage enhance its financial stability. Technical analysis indicates a stable stock price without strong momentum, while the lack of earnings call and corporate events data limits additional insights.

Positive Factors

Revenue Growth

Consistent revenue growth reflects the company's ability to expand its market presence and enhance its product offerings, supporting long-term business sustainability.

Cash Flow Generation

Robust cash flow generation ensures the company can fund operations, invest in growth opportunities, and maintain financial flexibility.

Operational Efficiency

Strong operational efficiency indicates effective cost management and the ability to maintain profitability, which is crucial for long-term success.

Negative Factors

Declining Net Profit Margin

A declining net profit margin can signal challenges in maintaining profitability, potentially impacting future earnings and shareholder returns.

Reduced Return on Equity

A decrease in ROE suggests reduced efficiency in generating profits from shareholders' investments, which may affect investor confidence.

Leverage Concerns

While leverage is moderate, any increase could strain financial resources and limit the company's ability to respond to market changes.

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 generates revenue through multiple streams, primarily from software sales, subscription services, and support contracts. The company sells its software products both as one-time purchases and through recurring subscription models, allowing customers to access updates and support as long as they maintain their subscriptions. Additionally, Reckon monetizes its offerings through add-ons and integrations that enhance functionality for users. The company's partnerships with accounting firms and professional service providers also contribute to its earnings by facilitating referrals and expanding its customer base. Overall, Reckon's revenue model leverages a combination of direct sales, subscription fees, and strategic alliances to drive financial performance.

Reckon Limited Financial Statement Overview

Summary

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.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	58.66M	54.04M	53.41M	51.23M	71.06M	65.42M
Gross Profit	29.98M	11.90M	13.50M	13.50M	63.05M	15.19M
EBITDA	-293.00K	20.19M	19.70M	17.77M	29.02M	29.74M
Net Income	5.41M	4.42M	5.57M	7.31M	9.82M	9.74M
Balance Sheet
Total Assets	57.06M	46.40M	41.21M	39.94M	71.87M	83.04M
Cash, Cash Equivalents and Short-Term Investments	829.00K	986.00K	975.00K	1.23M	1.39M	1.13M
Total Debt	8.93M	6.96M	5.20M	6.49M	21.14M	38.41M
Total Liabilities	31.24M	23.78M	21.58M	22.03M	40.05M	57.66M
Stockholders Equity	25.82M	22.25M	19.57M	17.14M	30.53M	25.38M
Cash Flow
Free Cash Flow	20.13M	17.53M	4.61M	7.47M	10.05M	12.42M
Operating Cash Flow	20.44M	17.89M	19.13M	7.69M	10.79M	12.91M
Investing Cash Flow	-22.79M	-14.82M	-15.29M	78.17M	12.90M	568.00K
Financing Cash Flow	1.34M	-3.08M	-4.11M	-85.93M	-23.46M	-13.46M

Reckon Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.57
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• 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 Positive. The current price of 0.57 is below the 20-day moving average (MA) of 0.57, below the 50-day MA of 0.58, and above the 200-day MA of 0.54, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 52.05 is Neutral, neither overbought nor oversold. The STOCH value of 58.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:RKN.

Reckon Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RKN	72 Outperform	AU$65.70M	12.13	21.98%	4.39%	9.30%	11.68%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
AMX	48 Neutral	AU$24.70M	-3.76	-31.01%	―	-3.43%	-40.65%
XF1	43 Neutral	AU$29.71M	-13.50	―	―	7.32%	67.11%
PRO	41 Neutral	AU$9.59M	-1.48	-133.07%	―	-4.90%	-52.78%
FLX	41 Neutral	AU$47.76M	-6.90	―	―	21.82%	6.83%