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Rekor Systems Inc (REKR)
NASDAQ:REKR
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Rekor Systems (REKR) AI Stock Analysis

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Rekor Systems

(NASDAQ:REKR)

Rating:47Neutral
Price Target:
$1.00
▼(-17.36%Downside)
Rekor Systems' overall score is weighed down by substantial financial challenges, particularly its operational losses and negative cash flow. While technical analysis and valuation suggest caution, recent corporate contracts and strategic initiatives offer a positive outlook for growth potential.
Positive Factors
Cost Management
Management is on pace to recognize the previously announced $15 million in annualized savings over the course of the year and continues to believe it can reach free cash flow breakeven in the near term.
International Expansion
The international opportunity is promising and key hires are positioning Rekor to capitalize on demand for roadway data technologies across Europe.
Partnerships
Management remains confident in the value of the SoundThinking partnership, for which SoundThinking offers Rekor’s license plate reader system as part of the PlateRanger-branded offering.
Negative Factors
Market Environment
Revenue weakness was driven by adverse weather and an uncertain government procurement environment.
Revenue Decline
First-quarter revenue declined 6%, down from a 4% organic decline in the previous quarter.

Rekor Systems (REKR) vs. SPDR S&P 500 ETF (SPY)

Rekor Systems Business Overview & Revenue Model

Company DescriptionRekor Systems, Inc., through its subsidiaries, develops and implements transformative mission-critical intelligent infrastructure solutions and services for transportation management, public safety, and commercial markets in the United States, Canada, and internationally. It offers Rekor One Traffic Management solutions, including software modules for roadway monitoring and response, an incident detection and management solution; traffic and infrastructure analytics to capture data for roadway and infrastructure analytics and planning; and live and archival traffic view for situational awareness of what is happening on roadways. The company also provides Rekor One Public Safety solutions comprising contactless compliance application that delivers a turnkey information and citation management solution to cities, states, and municipalities for primary and secondary offenses; Rekor scout that offers accurate license plate and vehicle recognition on any IP, traffic, or security camera, and can be subscribed to separately for use with existing camera or sensor systems; and Rekor blue, a smartphone app that retrieves accurate vehicle license plate number and state of registration, and automatically organizes information by sessions, capturing date, location, and timestamp for law enforcement. In addition, it offers Rekor CarCheck, an API of its vehicle recognition technology to respond with accurate license plate data, vehicle make, model, body type, and color for commercial applications; and AutoNotice, a cloud-based financial management application to record payments in the system and provide functionality to research, manage unapplied payments, and reconcile receipts. Further, the company provides hardware products, which includes Rekor Edge Series, a family of mountable vehicle recognition systems that seamlessly capture and process vehicle data. Rekor Systems, Inc. was founded in 2017 and is headquartered in Columbia, Maryland.
How the Company Makes MoneyRekor Systems generates revenue through the sale and licensing of its proprietary software solutions, hardware products, and related services. A significant portion of its income comes from subscription-based models where customers pay recurring fees for access to its cloud-based vehicle recognition platform. The company also earns money through strategic partnerships with law enforcement agencies, government entities, and private corporations who utilize its technology for traffic monitoring, tolling, and security purposes. Additionally, Rekor offers consultancy and support services that provide further revenue streams, contributing to its earnings.

Rekor Systems Earnings Call Summary

Earnings Call Date:May 14, 2025
(Q1-2025)
|
% Change Since: 18.63%|
Next Earnings Date:Aug 19, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant improvements in cost management and gross margin expansion. However, overall revenue decline and external challenges impacted performance, balancing the positive aspects with notable concerns about sales execution and meeting expectations.
Q1-2025 Updates
Positive Updates
Cost Optimization Success
Achieved a $2 million improvement in adjusted EBITDA loss due to meaningful reductions in operating expenses. Continuing efforts to streamline costs with initiatives like workforce realignment and voluntary compensation reductions.
Recurring Revenue Stability
Despite overall revenue decline, recurring revenue totaled $5.1 million for Q1 2025, marking a modest 3% increase from Q1 2024.
Improved Gross Margin
Adjusted gross margin for Q1 2025 was 48.2%, up from 46% in the same period last year, driven by a higher mix of margin accretive offerings.
New General Manager Structure
Rekor is implementing a new GM structure to enhance customer focus, accountability, and scalable growth, positioning the company for improved performance and market penetration.
Negative Updates
Decrease in Overall Revenue
Revenue reported at $9.2 million for Q1 2025, representing a 6% decrease compared to the same quarter last year.
Challenges in Sales Execution
Revenue was impacted by adverse weather conditions, delays in contract signings, and budget constraints from DOTs and public safety agencies due to uncertainties surrounding the new administration.
Underperformance Compared to Expectations
Management acknowledged that Q1 performance came in below expectations, both for the company and likely for investors.
Company Guidance
In the recent conference call, Rekor Systems provided guidance for fiscal year 2025, emphasizing a strategic shift to enhance revenue and operational efficiency. The company reported a revenue of $9.2 million for Q1 2025, a 6% decrease from the previous year, but highlighted a $2 million improvement in adjusted EBITDA loss due to cost optimization. Recurring revenue was stable at $5.1 million, showing a 3% increase from Q1 2024. The adjusted gross margin rose to 48.2%, up from 46%, driven by a higher mix of margin-accretive offerings. Rekor is implementing a new general manager structure to better focus on customer needs and accelerate product adoption. This reorganization aims to position Rekor for scalable revenue growth, both domestically and internationally, with a focus on driving sustainable revenues and improving customer focus. The company anticipates continued improvement in adjusted EBITDA as the year progresses, supported by revenue growth and expanding gross margins.

Rekor Systems Financial Statement Overview

Summary
Rekor Systems shows strong revenue growth but is burdened by substantial operational losses and negative cash flow. The gross profit margin is healthy, yet persistent losses and negative cash flow present significant financial challenges.
Income Statement
40
Negative
Rekor Systems has shown significant revenue growth over the years, with a TTM revenue of $45.45 million compared to $9.23 million in 2020. However, the company's profitability metrics are concerning. The gross profit margin stands at 49.8% TTM, indicating efficient cost management on revenue. Yet, the negative net profit margin of -118.1% and EBIT margin of -113.4% TTM highlight substantial operational losses and persistent net losses, suggesting challenges in achieving profitability.
Balance Sheet
50
Neutral
The company's balance sheet reflects a mixed financial position. The debt-to-equity ratio is manageable at 0.48 TTM, showing a relatively low level of debt compared to equity. However, the return on equity is negative at -160.9% TTM, driven by continued net losses, which undermines shareholder value. The equity ratio is 55.8% TTM, indicating a balanced capital structure with a reasonable proportion of equity financing.
Cash Flow
35
Negative
Cash flow metrics indicate financial strain. The operating cash flow to net income ratio is positive at 0.61 TTM, suggesting some ability to convert accounting profits into actual cash, albeit with negative operating cash flow of -$32.66 million. The free cash flow remains negative, impacting the company’s ability to self-finance growth and operations without external financing. Although there has been some reduction in free cash flow deficit, it remains a critical area of concern.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue46.03M34.93M19.92M14.29M9.23M
Gross Profit22.68M18.43M9.03M8.06M5.70M
EBITDA-48.86M-36.11M-78.04M-27.60M-10.10M
Net Income-61.41M-45.69M-83.45M-26.63M-13.96M
Balance Sheet
Total Assets82.47M92.15M83.84M125.88M40.40M
Cash, Cash Equivalents and Short-Term Investments5.01M15.71M1.92M25.80M20.59M
Total Debt32.44M42.33M19.76M11.36M2.41M
Total Liabilities48.33M58.78M34.50M24.79M8.54M
Stockholders Equity34.14M33.37M49.34M101.09M31.86M
Cash Flow
Free Cash Flow-34.15M-34.02M-43.78M-24.30M-16.10M
Operating Cash Flow-32.47M-32.63M-39.61M-18.03M-15.06M
Investing Cash Flow-9.37M270.00K-8.39M-47.37M5.19M
Financing Cash Flow31.45M45.60M23.87M70.99M29.02M

Rekor Systems Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.21
Price Trends
50DMA
1.17
Positive
100DMA
1.10
Positive
200DMA
1.22
Negative
Market Momentum
MACD
<0.01
Positive
RSI
50.10
Neutral
STOCH
53.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REKR, the sentiment is Positive. The current price of 1.21 is above the 20-day moving average (MA) of 1.20, above the 50-day MA of 1.17, and below the 200-day MA of 1.22, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 50.10 is Neutral, neither overbought nor oversold. The STOCH value of 53.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for REKR.

Rekor Systems Risk Analysis

Rekor Systems disclosed 37 risk factors in its most recent earnings report. Rekor Systems reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Rekor Systems Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$415.31M69.7418.82%26.77%-13.24%
63
Neutral
$33.80B5.84-11.67%1.84%5.28%-18.34%
51
Neutral
$86.46M26.79-3.58%-13.46%95.46%
48
Neutral
$165.11M-101.60%-46.41%6.05%
47
Neutral
$145.23M-121.54%17.97%21.12%
43
Neutral
$77.77M-600.12%-24.08%-51.13%
42
Neutral
$52.83M-168.24%230.96%91.63%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
REKR
Rekor Systems
1.21
-0.72
-37.31%
SNCR
Synchronoss Technologies
7.22
-2.65
-26.85%
VERI
Veritone
1.49
-1.56
-51.15%
PAYS
PaySign
7.65
2.50
48.54%
AUID
Ipsidy
3.99
-6.57
-62.22%
ARBE
Arbe Robotics
1.51
-0.79
-34.35%

Rekor Systems Corporate Events

Product-Related AnnouncementsBusiness Operations and Strategy
Rekor Systems Secures $1.2M Contract with Sun Belt State
Positive
Jun 6, 2025

On June 6, 2025, Rekor Systems announced a significant contract with a Sun Belt state transportation agency to deploy 150 Rekor Discover® systems under a one-year Data-as-a-Service contract worth $1.2 million. This initiative aims to modernize traffic data collection and monitoring using AI-enabled sensors, replacing outdated and intrusive technologies. The deployment is part of a broader trend where Rekor’s solutions are being adopted by various U.S. states, indicating strong momentum in the domestic market and potential for international expansion.

The most recent analyst rating on (REKR) stock is a Buy with a $4.00 price target. To see the full list of analyst forecasts on Rekor Systems stock, see the REKR Stock Forecast page.

Product-Related AnnouncementsBusiness Operations and Strategy
Rekor Systems Secures Major Contract with TxDOT
Positive
Jun 3, 2025

On June 3, 2025, Rekor Systems announced its selection by the Texas Department of Transportation (TxDOT) for a multi-year statewide contract to implement Rekor Command, an advanced incident management and situational awareness platform. This contract includes a significant purchase order allowing immediate deployment across all TxDOT districts, aiming to improve traffic operations, reduce congestion, and enhance roadway safety. The platform, which has already shown success in Texas, will now support additional features like the Traffic Impact Module and Work Zone API, further solidifying Rekor’s position as a key partner in modernizing Texas’s infrastructure.

The most recent analyst rating on (REKR) stock is a Buy with a $4.50 price target. To see the full list of analyst forecasts on Rekor Systems stock, see the REKR Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Rekor Systems Holds Annual Stockholders Meeting
Neutral
May 16, 2025

On May 15, 2025, Rekor Systems, Inc. held its Annual Meeting of Stockholders where 61,861,880 shares were represented. During the meeting, all nine director nominees were elected, the appointment of CBIZ CPAs P.C. as the independent public accountant for 2025 was ratified, and the compensation of the company’s named executive officers was approved on an advisory basis.

The most recent analyst rating on (REKR) stock is a Buy with a $4.50 price target. To see the full list of analyst forecasts on Rekor Systems stock, see the REKR Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025