Recon Technology (RCON) AI Stock Analysis

• Market Cap: $45.34M
• Dividend Yield: N/A
• Average Volume (3M): 11.44K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.54
• Revenue Growth: -2.48%
• EPS Growth: 83.11%
• Country: US
• Employees: 184
• Sector: Energy
• Sector Strength: 46
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): -0.57
• Shares Outstanding: 7,987,959
• 10 Day Avg. Volume: 18,704
• 30 Day Avg. Volume: 11,437
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.71
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• 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 primarily affected by its financial performance, which is hindered by consistent net losses and negative cash flows. The bearish technical indicators further weigh on the stock, suggesting a lack of momentum. Valuation concerns arise from a negative P/E ratio and the absence of a dividend yield. The stock's attractiveness is limited without any positive earnings call or corporate events to offset these challenges.

Positive Factors

Future Demand

RCON expects higher demand from offshore oil production customers.

Profit Margins

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

Negative Factors

Customer Concentration Risk

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

Permit Expiration

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

Revenue Delays

Potential revenue delays in the plastics recycling business and higher depletion rates in oilfields in China are expected.

Recon Technology Business Overview & Revenue Model

Company Description

Recon Technology, Ltd. (RCON) is a Chinese company that provides specialized oilfield services and products. The company operates in the oil and gas industry, focusing on the development and marketing of software and hardware solutions for oilfield production, transportation, and storage. Recon Technology offers a range of services including automation systems, equipment for oil and gas production, and environmental protection solutions.

How the Company Makes Money

Recon Technology makes money through the sale of its software and hardware solutions designed for the oil and gas sector. The company's revenue streams include the sale of automation systems, such as Supervisory Control and Data Acquisition (SCADA) systems, which help optimize production processes in oilfields. Additionally, Recon Technology generates income from selling equipment related to oil and gas extraction, as well as providing technical services and consulting. Partnerships with major oil companies and continuous innovation in environmental protection technology also contribute to the company's 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: Negative
• Last Price: 1.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCON, the sentiment is Negative. The current price of 1.5 is below the 20-day moving average (MA) of 1.69, below the 50-day MA of 1.80, and below the 200-day MA of 2.24, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 37.72 is Neutral, neither overbought nor oversold. The STOCH value of 23.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RCON.

Recon Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOG	70 Neutral	$2.23B	4.38	23.82%	7.53%	29.45%	-48.29%
PED	61 Neutral	$50.69M	2.75	16.18%	―	28.49%	6115.63%
Sector *	55 Neutral	$7.08B	3.69	-5.71%	6.15%	-1.38%	-53.90%
RCON	48 Neutral	$45.34M	―	-10.48%	―	-2.48%	83.11%
BRN	39 Underperform	$14.18M	―	-46.32%	―	-18.26%	-149.71%