Reko International (REKO) AI Stock Analysis

• Market Cap: C$16.56M
• Dividend Yield: N/A
• Average Volume (3M): 248.00
• Price to Earnings (P/E): ―
• Beta (1Y): -0.04
• Revenue Growth: -15.53%
• EPS Growth: -824.56%
• Country: CA
• Employees: 400
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial Goods
• EPS (TTM): -0.70
• Shares Outstanding: 5,518,513
• 10 Day Avg. Volume: 115
• 30 Day Avg. Volume: 248
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.41
• Price to Cash Flow (P/CF): 1.40
• P/FCF Ratio: 1.40
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Reko International's overall stock score reflects its financial challenges, including declining revenues and profitability, despite a stable balance sheet and strong cash flow management. The technical analysis suggests a bearish trend, with the stock being oversold, which may present a buying opportunity if conditions improve. Valuation is also a concern due to negative earnings and lack of dividend yield, further impacting the attractiveness of the stock.

Reko International Business Overview & Revenue Model

Company Description

Reko International Group Inc. is a diversified engineering and manufacturing firm based in Canada. The company operates primarily in the industrial sector, providing a range of services including precision machining, automation, and tooling solutions. Reko serves various industries, such as automotive, transportation, and consumer product markets, offering tailored engineering solutions and high-quality manufacturing capabilities.

How the Company Makes Money

Reko International Group generates revenue through its comprehensive engineering services and manufacturing solutions. The company earns money by designing, building, and servicing complex manufacturing systems, which include automation equipment and precision tooling. Reko's key revenue streams include contracts with major automotive manufacturers and suppliers, as well as diversified clients in other industrial sectors requiring custom automation and machining solutions. The company's revenue is bolstered by long-term partnerships and contracts with these clients, ensuring a steady flow of projects and ongoing service agreements that contribute to its earnings.

Reko International Financial Statement Overview

Summary

Reko International faces challenges with declining revenues and profitability. The income statement indicates negative profitability with a net loss, though EBITDA remains positive. The balance sheet is stable with strong equity and manageable debt levels, and cash flows are strong despite net losses, reflecting effective cash management.

Income Statement

Reko International's income statement shows a declining trend in revenues over the past year, with a decrease from $53.88M to $40.81M in TTM. The company is currently experiencing negative profitability with a net loss of $4.12M TTM. Gross profit margin has decreased to 14.35% TTM from 16.19% last year, indicating cost pressures. The negative EBIT margin at -0.88% TTM highlights operational inefficiencies. However, EBITDA margin remains positive at 7.02% TTM, suggesting some capacity to generate operational cash flow.

Balance Sheet

The balance sheet of Reko International remains relatively stable with stockholders' equity at $41.51M and a moderate debt-to-equity ratio of 0.26. The equity ratio stands at 72.26% TTM, indicating a strong reliance on equity financing. Although total assets have decreased, the company maintains a healthy cash position with $13.83M in cash and cash equivalents. This stability in equity and liquidity provides a solid foundation, though declining total assets and liabilities need monitoring.

Cash Flow

Reko International's cash flow statement showcases a strong operating cash flow of $8.59M TTM, which is significantly higher than net income, indicating a good conversion of revenues into cash. The free cash flow of $7.47M TTM shows positive cash generation after capital expenditures. However, free cash flow decreased compared to the previous year, which may impact future investments. The free cash flow to net income ratio is positive, suggesting effective cash management despite net losses.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
40.81M	44.28M	46.75M	53.88M	39.20M	40.23M
	Gross Profit
5.86M	4.85M	7.09M	8.73M	4.83M	4.44M
	EBIT
-358.00K	-907.00K	1.60M	2.70M	1.96M	1.86M
	EBITDA
2.87M	3.03M	5.31M	6.54M	2.54M	3.01M
	Net Income Common Stockholders
-4.12M	-3.89M	1.32M	2.12M	864.00K	763.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.83M	11.43M	12.14M	14.02M	10.71M	9.44M
	Total Assets
57.44M	58.03M	62.79M	66.89M	62.36M	61.30M
	Total Debt
10.60M	10.96M	12.06M	12.97M	9.08M	9.52M
	Net Debt
-3.23M	-475.00K	-76.00K	-1.05M	2.87M	5.08M
	Total Liabilities
15.93M	16.65M	16.88M	20.48M	15.30M	14.39M
	Stockholders Equity
41.51M	41.38M	45.91M	46.41M	47.06M	46.91M
Cash Flow		Free Cash Flow
7.46M	1.02M	1.04M	2.44M	2.69M	4.97M
	Operating Cash Flow
8.59M	3.24M	4.47M	7.80M	5.78M	6.66M
	Investing Cash Flow
-719.00K	-1.81M	-3.10M	-788.00K	-2.76M	-6.56M
	Financing Cash Flow
-1.74M	-2.13M	-3.26M	797.00K	-1.25M	-1.10M

Reko International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:REKO, the sentiment is Negative. The current price of 3 is below the 20-day moving average (MA) of 3.31, below the 50-day MA of 3.64, and below the 200-day MA of 3.65, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 11.37 is Positive, neither overbought nor oversold. The STOCH value of <0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:REKO.

Reko International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LNR	77 Outperform	C$3.08B	12.39	4.98%	2.03%	14.14%	21.46%
XTC	73 Outperform	$232.32M	8.45	7.46%	7.21%	-1.93%	3.61%
CAE	72 Outperform	$11.19B	―	-5.31%	―	1.44%	-183.14%
MG	71 Outperform	$14.94B	11.46	8.62%	5.02%	2.72%	5.00%
Sector *	62 Neutral	$8.16B	12.85	0.64%	3.04%	3.83%	-15.83%
ATS	60 Neutral	C$3.60B	40.44	5.30%	―	-7.46%	-49.87%
REKO	46 Neutral	C$16.56M	―	-8.95%	―	-15.53%	-824.56%

Reko International Corporate Events

Reko International Announces Share Buyback Plan

Reko International Group Inc. has announced a normal course issuer bid to repurchase up to 276,066 of its common shares, representing approximately 5% of its outstanding shares. This decision reflects the company’s belief that its shares are undervalued, making them an attractive investment. The repurchase plan is set to take place over a 12-month period starting January 9, 2025, and all acquired shares will be canceled, potentially impacting share value and shareholder equity positively.