Recon Technology (RCON) AI Stock Analysis

• Market Cap: $16.32M
• Dividend Yield: N/A
• Average Volume (3M): 10.04K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.66
• 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: 15,371
• 30 Day Avg. Volume: 10,038
• PEG Ratio: 0.12
• Price to Book (P/B): 0.35
• Price to Sales (P/S): 2.48
• P/FCF Ratio: -3.76
• Enterprise Value/Market Cap: 14.18
• Enterprise Value/Revenue: 3.49
• Enterprise Value/Gross Profit: 15.19
• Enterprise Value/Ebitda: -4.27
• 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: 46 Neutral
• Price Target: $1.50 ▲(0.67% Upside)

The score is primarily held down by weak financial performance (large ongoing losses and negative operating/free cash flow) despite strong recent revenue growth and low leverage. Technicals are modestly constructive in the near term but still below longer-term averages, and valuation is hindered by negative earnings and no dividend yield support.

Positive Factors

Strong Revenue Growth

A 46.8% top-line increase indicates meaningful demand for Recon's automation and control solutions. Durable revenue expansion improves scale and market relevance in China’s energy sector, supporting long-term product investment and potential margin recovery if cost structure is managed.

Low Financial Leverage

Very low debt-to-equity gives the company financial flexibility to invest in R&D, service contracts, or absorb cyclical downturns without heavy interest burdens. This reduces insolvency risk and preserves options to pursue strategic opportunities over the medium term.

Recurring & Contracted Revenue Streams

A business mix of product sales plus maintenance, support contracts and partnerships creates recurring revenue and customer stickiness. For industrial automation in oil & gas, such contracted services improve revenue visibility and resilience versus one-off sales.

Negative Factors

Persistent Unprofitability

Severely negative net and operating margins indicate the core business does not generate profits at current scale. Without structural cost reductions, pricing power, or higher-margin mix, persistent losses will impair the company’s ability to self-fund growth or reward shareholders.

Negative Operating and Free Cash Flow

Negative operating and free cash flow reflect cash burn from operations and signal reliance on external financing. Even with some FCF growth metrics distorted by negative earnings, sustained cash outflows threaten runway and force dilutive or costly financing choices absent rapid operational improvement.

Potential for Significant Share Dilution

Proposal to vastly expand authorized shares and permit reverse splits up to 1-for-8,000 gives management broad power to issue equity or restructure share count. This raises long-term dilution and governance risk, affecting existing ownership and future financing dynamics.

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 proprietary technology products and services. The company offers various solutions, such as automation systems, data management software, and remote monitoring services, which are tailored to meet the operational requirements of the oil and gas industry. Key revenue streams include direct sales of hardware and software, ongoing maintenance and support contracts, and consulting services. Additionally, Recon may engage in partnerships with industry players to enhance its offerings and expand its market reach, contributing to its overall earnings. The company's ability to secure contracts with major oil and gas companies in China further bolsters its revenue generation capabilities.

Recon Technology Financial Statement Overview

Summary

Financials are weak: persistent losses with a very negative net margin (-64.25%) and negative EBIT/EBITDA margins. Revenue grew strongly (46.8%) and leverage is low (debt-to-equity 0.0737), but negative operating/free cash flow and negative ROE keep the score depressed.

Income Statement

Recon Technology's income statement reveals significant challenges. The company has experienced negative net profit margins consistently over the years, with the latest being -64.25%. Despite a revenue growth rate of 46.8% in the most recent year, profitability remains a concern with negative EBIT and EBITDA margins. The gross profit margin has also declined from previous years, indicating cost pressures or inefficiencies.

Balance Sheet

The balance sheet shows a relatively low debt-to-equity ratio of 0.0737, suggesting limited leverage and potential financial stability. However, the return on equity is negative, indicating that the company is not generating returns for its shareholders. The equity ratio is reasonable, but the negative ROE highlights profitability issues.

Cash Flow

Cash flow analysis indicates ongoing challenges with negative operating and free cash flows. Although there is a slight improvement in free cash flow growth, the operating cash flow to net income ratio is negative, reflecting operational inefficiencies. The free cash flow to net income ratio is above 1, suggesting that free cash flow is higher than net income, but this is due to negative earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	66.29M	66.29M	68.85M	67.11M	83.78M	47.94M
Gross Profit	15.24M	15.24M	20.88M	18.87M	19.42M	7.22M
EBITDA	-54.17M	-54.17M	-47.52M	-52.01M	101.68M	-57.66M
Net Income	-42.59M	-42.59M	-49.87M	-59.17M	95.59M	-22.83M
Balance Sheet
Total Assets	525.62M	525.62M	552.39M	531.82M	490.24M	566.52M
Cash, Cash Equivalents and Short-Term Investments	102.47M	102.47M	198.08M	288.31M	316.97M	344.00M
Total Debt	34.44M	34.44M	40.14M	35.56M	31.60M	42.63M
Total Liabilities	71.65M	71.65M	61.46M	92.67M	77.36M	279.00M
Stockholders Equity	467.43M	467.43M	502.55M	449.21M	420.63M	295.10M
Cash Flow
Free Cash Flow	-43.71M	-43.71M	-44.25M	-52.63M	-26.94M	-34.57M
Operating Cash Flow	-33.77M	-33.77M	-43.75M	-51.69M	-26.25M	-34.05M
Investing Cash Flow	33.71M	33.71M	2.98M	-245.22M	-328.68K	-46.54M
Financing Cash Flow	-3.27M	-3.27M	45.02M	56.38M	-10.00M	394.03M

Recon Technology Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.49
• 50DMA: Positive
• 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 1.49 is above the 20-day moving average (MA) of 1.47, above the 50-day MA of 1.38, and below the 200-day MA of 1.95, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 46.91 is Neutral, neither overbought nor oversold. The STOCH value of 21.14 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
SND	69 Neutral	$202.48M	47.55	1.61%	―	18.98%	―
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
DTI	52 Neutral	$133.76M	-21.25	-5.18%	―	7.46%	-165.76%
KLXE	50 Neutral	$49.59M	-0.65	―	―	-12.57%	-45.75%
NINE	48 Neutral	$25.42M	―	―	―	2.59%	16.02%
RCON	46 Neutral	$16.32M	-0.66	-8.78%	―	-3.41%	-50.85%
DWSN	45 Neutral	$64.27M	-19.36	-19.81%	―	-22.31%	39.11%

Recon Technology Corporate Events

Recon Technology Calls February 2026 AGM to Expand Authorized Capital and Authorize Large Reverse Share Splits

On December 30, 2025, Recon Technology filed a Form 6-K to furnish its proxy materials for the annual general meeting of shareholders for the fiscal year ended June 30, 2025, which will be held at its Beijing headquarters on February 13, 2026. Shareholders of record as of December 29, 2025 will vote on the appointment of two Class I directors whose terms would run to the AGM following the 2028 fiscal year, ratification of Enrome LLP as independent auditor for the year ending June 30, 2026, a substantial increase in authorized share capital for both Class A and Class B ordinary shares, and broad authority for the board to execute one or more reverse share splits of Class A shares at ratios up to 1-for-8,000 over the next two years, including related adjustments to fractional shares and authorized capital. The proposals would significantly expand Recon’s capacity to issue new equity and give directors wide discretion to undertake share consolidations, potentially affecting capital structure, future financing flexibility, and the voting power and economic interests of existing shareholders.

The most recent analyst rating on (RCON) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Recon Technology stock, see the RCON Stock Forecast page.