Recon Technology (RCON) AI Stock Analysis

• Market Cap: $91.88M
• Dividend Yield: N/A
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.70
• Revenue Growth: -2.48%
• EPS Growth: 83.11%
• Country: US
• Employees: 184
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): -0.31
• Shares Outstanding: 10,627,426
• 10 Day Avg. Volume: 5,196,980
• 30 Day Avg. Volume: 1,738,680
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.03
• Enterprise Value/Revenue: 0.03
• Enterprise Value/Gross Profit: 0.09
• Enterprise Value/Ebitda: -0.04
• 1Y Price Target: $4.50
• Price Target Upside: 50.00% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 55 Neutral
• Price Target: $4.50 ▲(50.00% Upside)

Recon Technology's stock score is primarily impacted by financial challenges, including consistent net losses and negative cash flows. While technical analysis shows bullish momentum, valuation concerns due to negative earnings weigh heavily. The strong equity position provides some financial stability, but liquidity issues remain a significant risk.

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. (RCON) is a Chinese company that specializes in providing oilfield services and products. It operates primarily in the petroleum industry, offering automation products, tools, and services that enhance the efficiency of oil and gas extraction and production processes. The company's core offerings include equipment automation, software for oilfield management, and other related technical services designed to optimize operations for its clients, primarily in China's oilfield markets.

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 with strong equity, the income and cash flow statements suggest operational inefficiencies. The company needs strategic measures to enhance revenue and manage costs effectively.

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
EBITDA	-50.37M	-52.01M	101.68M	-57.66M	-18.57M
Net Income	-49.87M	-59.17M	95.59M	-25.87M	-20.12M
Balance Sheet
Total Assets	552.39M	531.82M	490.24M	566.52M	194.41M
Cash, Cash Equivalents and Short-Term Investments	198.08M	288.31M	316.97M	344.00M	30.34M
Total Debt	40.14M	35.56M	31.60M	42.63M	30.72M
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: 3.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 3 is above the 20-day moving average (MA) of 2.72, above the 50-day MA of 2.51, and above the 200-day MA of 2.21, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 52.95 is Neutral, neither overbought nor oversold. The STOCH value of 21.34 is Neutral, 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	78 Outperform	$80.88M	6.51	12.76%	―	19.15%	-71.62%
DTI	59 Neutral	$77.24M	26.47	-1.66%	―	8.19%	-110.61%
RCON	55 Neutral	$91.88M	―	-10.48%	―	-2.48%	83.11%
DWSN	45 Neutral	$43.38M	―	-39.40%	―	-40.77%	-14.13%
Sector *	45 Neutral	AU$1.32B	-8.62	-15.56%	7.70%	2.10%	-32.50%
NINE	44 Neutral	$30.16M	―	73.91%	―	-4.38%	-3.77%
KLXE	44 Neutral	$31.07M	―	-375.26%	―	-16.38%	-359.80%