Rekor Systems (REKR) AI Stock Analysis

• Market Cap: $226.52M
• Dividend Yield: N/A
• Average Volume (3M): 2.54M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.08
• Revenue Growth: 11.89%
• EPS Growth: 34.27%
• Country: US
• Employees: 319
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.03
• Shares Outstanding: 136,457,580
• 10 Day Avg. Volume: 2,513,845
• 30 Day Avg. Volume: 2,535,364
• PEG Ratio: 1.59
• Price to Book (P/B): 3.96
• Price to Sales (P/S): 2.94
• P/FCF Ratio: -3.96
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 4.57
• Enterprise Value/Gross Profit: 8.47
• Enterprise Value/Ebitda: -6.43
• 1Y Price Target: $4.00
• Price Target Upside: 151.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: $1.50 ▼(-5.66% Downside)

Rekor Systems' overall score is driven by strong revenue growth and improved operational efficiency, as highlighted in the earnings call. However, significant profitability and cash flow challenges, along with a negative valuation, weigh down the score.

Positive Factors

Recurring & Revenue Growth

Sustained top-line expansion and rising recurring revenue increase revenue visibility and reduce reliance on one-time sales. A larger recurring base supports predictable cash inflows, customer retention economics, and scalable upsell opportunities that strengthen long-term revenue durability.

Improving Gross Margins via Software Mix

A marked shift toward higher-margin software sales materially improves unit economics and operating leverage. Higher gross margins enable reinvestment or faster path to profitability as recurring software revenue grows, making margins more sustainable over multiyear horizons.

Large Contracts and Product Adoption

Multiyear, state-level contracts provide backlog, predictable revenue streams and validation of product-market fit. Broad deployments and state partnerships strengthen competitive positioning, create referenceability for municipal sales, and support durable revenue growth over contract terms.

Negative Factors

Negative Operating and Free Cash Flow

Persistent negative operating and free cash flows reduce internal funding for growth and force reliance on external capital. Over several quarters this limits the firm's ability to scale, invest in product development, and withstand demand shocks without dilutive financing.

Ongoing Losses and Weak Profitability

Despite margin improvement, continued EBITDA losses and negative net margins imply Rekor hasn't achieved structural profitability. This constrains free cash generation and ROE recovery, prolonging dependence on cost cuts or revenue scaling to reach sustainable earnings.

Dilutive Financing and Restrictive Side Letter

Recent equity-linked financing indicates ongoing funding needs and dilutive capital issuance. The side letter restriction limits financing flexibility while warrants are outstanding, potentially constraining access to cheaper or more flexible capital and affecting strategic optionality.

Rekor Systems Business Overview & Revenue Model

Company Description

Rekor 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 Money

Rekor Systems generates revenue through multiple streams, primarily from the sale of its software and hardware solutions for vehicle recognition and analytics. The company offers subscription-based services that provide continuous updates and support for its technology, creating a recurring revenue model. Additionally, Rekor engages in partnerships with law enforcement agencies and municipalities, supplying tailored solutions that often include installation and ongoing maintenance. Strategic collaborations with other technology providers also enhance its market reach, contributing to its earnings through joint ventures and integrated solutions.

Rekor Systems Financial Statement Overview

Summary

Rekor Systems shows revenue growth but faces significant profitability and cash flow challenges. Despite improved leverage, negative returns on equity and cash flow issues pose risks.

Income Statement

Rekor Systems shows a consistent increase in revenue, with a TTM growth rate of 8.04%. However, the company struggles with profitability, as indicated by negative net profit and EBIT margins. The gross profit margin is relatively stable at 45.24% TTM, but the net profit margin remains deeply negative, reflecting ongoing operational challenges.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.85 TTM, indicating better leverage management compared to previous years. However, the return on equity is negative, highlighting profitability issues. The equity ratio is not provided, but the overall financial stability is moderate with some risk due to negative equity returns.

Cash Flow

Cash flow metrics indicate challenges, with negative operating and free cash flows. The free cash flow growth rate is negative at -11.56% TTM, and the operating cash flow to net income ratio is also negative, suggesting cash flow issues. However, the free cash flow to net income ratio is slightly positive, indicating some cash generation relative to net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	49.03M	46.03M	34.93M	19.92M	11.57M	9.23M
Gross Profit	26.45M	22.68M	18.43M	9.03M	7.03M	5.72M
EBITDA	-34.84M	-49.40M	-36.11M	-77.95M	-27.62M	-10.13M
Net Income	-44.04M	-61.41M	-45.69M	-83.11M	-26.78M	-14.18M
Balance Sheet
Total Assets	80.98M	82.47M	92.15M	83.84M	125.88M	40.40M
Cash, Cash Equivalents and Short-Term Investments	3.16M	5.01M	15.71M	1.92M	25.80M	20.59M
Total Debt	29.91M	32.44M	42.33M	19.76M	11.54M	2.41M
Total Liabilities	44.49M	48.33M	58.78M	34.50M	24.79M	8.54M
Stockholders Equity	36.48M	34.14M	33.37M	49.34M	101.09M	31.86M
Cash Flow
Free Cash Flow	-28.39M	-34.15M	-34.02M	-43.78M	-24.26M	-16.10M
Operating Cash Flow	-25.50M	-32.47M	-32.63M	-39.61M	-18.03M	-15.06M
Investing Cash Flow	-2.79M	-9.37M	270.00K	-8.39M	-47.37M	4.59M
Financing Cash Flow	20.73M	31.45M	45.60M	23.87M	70.99M	29.62M

Rekor Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REKR, the sentiment is Negative. The current price of 1.59 is above the 20-day moving average (MA) of 1.56, below the 50-day MA of 1.80, and above the 200-day MA of 1.46, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 44.74 is Neutral, neither overbought nor oversold. The STOCH value of 57.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for REKR.

Rekor Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
REKR	54 Neutral	$226.52M	-3.70	-114.65%	―	11.89%	34.27%
KLTR	54 Neutral	$245.44M	-12.82	-86.46%	―	1.88%	53.31%
STEM	51 Neutral	$148.93M	―	―	―	-35.61%	―
ZENA	51 Neutral	$126.55M	-6.57	-100.32%	―	312.20%	―
ARBE	44 Neutral	$144.07M	―	-142.36%	―	-34.35%	20.88%
AISP	43 Neutral	$109.36M	-1.94	―	―	-62.56%	-250.18%

Rekor Systems Corporate Events

Rekor Systems Closes $14 Million Direct Offering

On December 13, 2025, Rekor Systems entered into an underwriting agreement for an underwritten registered direct offering of 8,571,428 units to a single institutional investor, with each unit priced at $1.75. The offering closed on December 16, 2025, generating approximately $14 million in net proceeds for the company, which plans to use the funds for working capital, capital expenditures, and general corporate purposes. The offering included a side letter agreement prohibiting Rekor from entering into variable rate transactions while the investor holds any warrants. The issuance of these units and associated warrants is expected to impact Rekor’s financial flexibility and market positioning.

The most recent analyst rating on (REKR) stock is a Hold with a $2.00 price target. To see the full list of analyst forecasts on Rekor Systems stock, see the REKR Stock Forecast page.