Rekor Systems (REKR) AI Stock Analysis

• Market Cap: $77.65M
• Dividend Yield: N/A
• Average Volume (3M): 4.53M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.92
• Revenue Growth: 31.76%
• EPS Growth: 2.90%
• Country: US
• Employees: 319
• Sector: Technology
• Sector Strength: 40
• Industry: Software - Infrastructure
• EPS (TTM): -0.71
• Shares Outstanding: 110,912,210
• 10 Day Avg. Volume: 4,693,315
• 30 Day Avg. Volume: 4,525,821
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.14
• Price to Cash Flow (P/CF): -2.40
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $4.50
• Price Target Upside: 492.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Rekor Systems' overall stock score is influenced by strong revenue growth yet marred by significant profitability challenges and financial instability. Technical analysis points to bearish trends, while valuation metrics remain unattractive due to negative earnings. Despite positive strategic shifts noted in the earnings call, such as partnerships and improved EBITDA, risks like government contract challenges and leadership changes create a cautious outlook.

Positive Factors

Business Development

Management remained positive on business development pipeline in Florida, Texas, Georgia, Maryland, and New Mexico.

Financial Performance

Rekor reported fourth-quarter revenue and EBITDA that were better than the company’s preliminary results.

Partnership Expansion

The SoundThinking partnership, for which SoundThinking offers Rekor’s license plate reader system as part of a new PlateRanger-branded offering, is ramping up.

Negative Factors

Consensus Results

Rekor reported third-quarter results below consensus with 16% revenue growth and a 3% organic decline.

Organic Revenue Decline

While revenue increased by 20%, it is estimated that organic revenue declined by 4%.

Rekor Systems Business Overview & Revenue Model

Company Description

Rekor Systems, Inc. is a technology company that specializes in intelligent infrastructure and roadway intelligence. Operating primarily in the public safety, transportation management, and commercial markets, Rekor offers advanced vehicle recognition systems, data analysis, and artificial intelligence-driven solutions to improve traffic management and enhance public safety. Its core products include vehicle identification and licensing systems, traffic management platforms, and data analytics solutions.

How the Company Makes Money

Rekor Systems generates revenue through the sale and licensing of its software and hardware solutions, primarily focusing on vehicle recognition and traffic management systems. The company offers its products to government agencies, law enforcement, and commercial clients, which pay for the implementation, usage, and maintenance of these systems. Additionally, Rekor monetizes its data analytics capabilities by providing insights and actionable intelligence to clients, often through subscription-based models. Partnerships with government entities and infrastructure companies also contribute to its revenue streams, allowing Rekor to expand its market reach and application areas.

Rekor Systems Financial Statement Overview

Summary

Rekor Systems is facing a challenging financial environment with persistent losses and negative cash flow. While the company has managed to improve revenue and gross profit margins, significant efforts are needed to achieve profitability and positive cash flow. Moderate leverage and a decent equity position provide some stability, but continued focus on cost management and operational efficiency is crucial for future improvements.

Income Statement

Rekor Systems has shown revenue growth over the past few years, with a 25.4% increase in TTM revenue compared to the previous year. However, the company continues to operate at a loss with a negative EBIT margin of -68.4% and a net profit margin of -115%, indicating significant challenges in achieving profitability. The gross profit margin has slightly improved to 44.1%, showing some operational efficiency gains.

Balance Sheet

The balance sheet reveals a debt-to-equity ratio of 0.8, indicating moderate leverage. The equity ratio stands at 39.9%, suggesting that a significant portion of the company’s assets are funded by equity. Although the return on equity is negative due to ongoing losses, the company's equity position has strengthened slightly compared to last year.

Cash Flow

The cash flow statement indicates challenges with negative free cash flow of -$34.37 million for the TTM period. The operating cash flow to net income ratio is 0.66, reflecting operational inefficiencies. The company has managed to secure financing, as seen in the positive financing cash flow, which may help in short-term liquidity.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
43.82M	34.93M	19.92M	14.29M	9.23M	19.32M
	Gross Profit
19.34M	18.43M	9.03M	8.06M	5.70M	10.26M
	EBIT
-29.96M	-42.12M	-50.95M	-31.21M	-11.85M	-7.54M
	EBITDA
-41.72M	-36.11M	-78.04M	-27.60M	-10.10M	-7.07M
	Net Income Common Stockholders
-50.40M	-45.69M	-83.45M	-26.63M	-13.96M	-14.41M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
567.87K	15.71M	1.92M	25.80M	20.59M	1.18M
	Total Assets
2.55M	92.15M	83.84M	125.88M	40.40M	28.99M
	Total Debt
0.00	42.33M	19.76M	11.36M	2.41M	23.27M
	Net Debt
-567.87K	26.94M	17.84M	-14.43M	-18.19M	22.09M
	Total Liabilities
966.61K	58.78M	34.50M	24.79M	8.54M	32.22M
	Stockholders Equity
1.53M	33.37M	49.34M	101.09M	31.86M	-3.23M
Cash Flow		Free Cash Flow
-34.37M	-34.02M	-43.78M	-24.30M	-16.10M	-22.14M
	Operating Cash Flow
-33.06M	-32.63M	-39.61M	-18.03M	-15.06M	-21.33M
	Investing Cash Flow
-8.94M	270.00K	-8.39M	-47.37M	5.19M	-563.00K
	Financing Cash Flow
45.61M	45.60M	23.87M	70.99M	29.02M	20.99M

Rekor Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

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 0.76 is below the 20-day moving average (MA) of 0.98, below the 50-day MA of 1.44, and below the 200-day MA of 1.35, indicating a bearish trend. The MACD of -0.15 indicates Negative momentum. The RSI at 35.27 is Neutral, neither overbought nor oversold. The STOCH value of 15.96 is Positive, 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
AXON	78 Outperform	$38.09B	104.03	19.10%	―	33.32%	111.64%
LHX	76 Outperform	$37.93B	25.65	7.85%	2.32%	9.82%	22.33%
KTOS	59 Neutral	$4.25B	260.98	1.40%	―	9.57%	―
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%
VSAT	54 Neutral	$1.15B	―	-8.49%	―	19.02%	76.67%
REKR	45 Neutral	$77.65M	―	-181.93%	―	31.76%	2.90%
ADTN	45 Neutral	$594.12M	―	-123.20%	―	-19.70%	-70.40%

Rekor Systems Corporate Events

Rekor Systems CEO Resignation Amid Strategic Realignment

Rekor Systems announced the resignation of CEO David Desharnais, effective March 14, 2025, as part of a strategic realignment to improve financial performance and accelerate growth. The company reported a projected 30% increase in full-year 2024 revenue, driven by cost reduction efforts and a focus on its Rekor Scout and Discover product lines. These initiatives aim to enhance cash flow and reduce reliance on external capital, positioning Rekor for domestic and international expansion.