Recon Technology (RCON) AI Stock Analysis

• Market Cap: $21.72M
• Dividend Yield: N/A
• Average Volume (3M): 28.46K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.60
• Revenue Growth: -3.41%
• EPS Growth: -50.85%
• Country: US
• Employees: 184
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): -0.34
• Shares Outstanding: 10,627,426
• 10 Day Avg. Volume: 25,389
• 30 Day Avg. Volume: 28,463
• PEG Ratio: 0.02
• Price to Book (P/B): 0.15
• Price to Sales (P/S): 1.13
• P/FCF Ratio: -1.75
• Enterprise Value/Market Cap: -0.33
• Enterprise Value/Revenue: -0.11
• Enterprise Value/Gross Profit: -0.32
• Enterprise Value/Ebitda: 0.10
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 55 Neutral
• Price Target: $4.50 ▲(163.16% 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

Strong Equity Position

A strong equity position with low debt enhances financial stability, providing a buffer against economic downturns and supporting long-term growth.

Strategic Partnerships

Partnerships with major oil companies strengthen market position and expand service offerings, driving long-term revenue growth and competitive advantage.

Custom Solutions

Offering tailored solutions increases customer loyalty and market differentiation, supporting sustained revenue streams and competitive positioning.

Negative Factors

Negative Cash Flows

Negative cash flows limit the company's ability to invest in growth opportunities and meet financial obligations, threatening long-term viability.

Declining Revenues

Decreasing revenues indicate potential loss of market share or demand, challenging the company's ability to sustain operations and growth.

Consistent Net Losses

Ongoing net losses undermine financial health, reducing reinvestment capacity and increasing reliance on external funding for sustainability.

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. The income statement reveals declining revenues and gross profit margins, while the balance sheet shows financial stability, supported by a strong equity position. However, liquidity challenges persist due to negative operating cash flow.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 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	-22.83M	-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	-44.25M	-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: 1.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 1.71 is below the 20-day moving average (MA) of 1.95, below the 50-day MA of 2.13, and below the 200-day MA of 2.13, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 34.19 is Neutral, neither overbought nor oversold. The STOCH value of 9.71 is Positive, 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
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
DTI	60 Neutral	$80.20M	―	-4.23%	―	9.74%	-132.61%
RCON	55 Neutral	$21.72M	―	-8.78%	―	-3.41%	-50.85%
SND	51 Neutral	$91.47M	115.38	0.33%	―	3.43%	-36.73%
DWSN	50 Neutral	$58.37M	―	-38.69%	―	-38.69%	-30.53%
KLXE	44 Neutral	$30.86M	―	―	―	-13.29%	-106.14%
NINE	39 Underperform	$24.57M	―	―	―	3.23%	31.76%