Liabilities Breakdown
13.1 M
Current Liabilities
20.6 M
Long-Term Liabilities
| Total Liabilities | 27.33 Million | |
| Current Liabilities | 13.08 Million | |
| Long-Term Liabilities | 20.56 Million | |
| Tax Liabilities | 45,315.79 |
Should I hold on to my Rekor (USA Stocks:REKR) position?
 | By Ellen Johnson | Macroaxis Story |
Rekor Systems, a domestic technology company specializing in software, recently experienced a 6% pullback, presenting a potential buying opportunity for investors. Despite reporting a loss of $50.9M in EBIT and $43.8M in free cash flow, the company has a total stockholder equity of $49.3M and an end period cash flow of $2.5M. With a total revenue of $19.9M against a cost of revenue of $10.9M, and net receivables of $3.6M, the company's financials show potential for growth. Furthermore, the company has made significant investments in research and development, amounting to $18.6M, indicating a commitment to innovation and future growth. Analysts have issued two strong buy recommendations for the stock, with a target price estimated value of $4.25, compared to the naive expected forecast value of $3.03. This, combined with the recent pullback, makes Rekor Systems an attractive option for investors looking to capitalize on the current market conditions. The upcoming fiscal quarter for Rekor Systems is expected to end on September 30, 2023. The company's Current Ratio is relatively stable at present, compared to the previous year. Last year, Rekor Systems reported a Current Ratio of 0.60. As of September 8, 2023, the Debt to Equity Ratio is anticipated to increase to 0.72, while Earnings Before Tax are likely to decrease by 86.3 million. While some millennials may be indifferent towards the software sector, it is sensible to consider Rekor Systems as a distinctive investment option.
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Reviewed by Raphi Shpitalnik
Rekor Systems, a key player in the Software-Infrastructure industry, presents a lucrative buying opportunity after a 6.7% pullback. The company has shown strong financial health with a Net Invested Capital of 53.8M and a Total Revenue of 19.9M. Despite a loss in Income Tax Expense of 987K and a negative Change In Working Capital of 426K, the firm managed to generate Other Cashflows From Financing Activities amounting to 1.3M. The company's risk-adjusted performance, as indicated by a Treynor Ratio of 0.5047 and a Jensen Alpha of 1.37, suggests potential for significant returns. The recent pullback coupled with these robust financial indicators makes Rekor Systems an attractive investment option.
More Analysis
Rekor Systems currently has liabilities amounting to 19.76 million, with a Debt to Equity (D/E) ratio of 0.34. This ratio is relatively average when compared to similar companies. The company's current ratio stands at 0.92, suggesting that it has a negative working capital and may struggle to meet financial obligations when they are due. While debt can aid Rekor Systems until it encounters difficulties in paying it off, either with new capital or free cash flow, there is a risk that shareholders could end up with nothing if the company fails to meet its legal debt repayment obligations. However, it's more common for companies like Rekor Systems to issue additional shares at discounted prices, thereby diluting the value for existing shareholders. In such instances, debt can be a more effective tool for Rekor Systems to invest in growth at high rates of return. When considering Rekor Systems' use of debt, it's important to also take into account its cash and equity positions.Rekor Systems financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Rekor Systems, including all of Rekor Systems's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Rekor Systems assets, the company is considered highly leveraged. Understanding the composition and structure of overall Rekor Systems debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.Understanding Rekor Total Liabilities
Rekor Systems liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Rekor Systems has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Rekor Systems balance sheet include debt obligations and money owed to different Rekor Systems vendors, workers, and loan providers. Below is the chart of Rekor short long-term liabilities accounts currently reported on its balance sheet. You can use Rekor Systems financial leverage analysis tool to get a better grip on understanding its financial positionHow important is Rekor Systems's Liquidity
Rekor Systems financial leverage refers to using borrowed capital as a funding source to finance Rekor Systems ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Rekor Systems financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Rekor Systems' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Rekor Systems' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Rekor Systems's total debt and its cash.
A Deeper Perspective On Rekor Systems
The entity reported the previous year's revenue of 19.92 M. Net Loss for the year was (83.45 M) with profit before overhead, payroll, taxes, and interest of 9.03 M.
Rekor Systems, a key player in the Software-Infrastructure industry, has recently experienced a 6% pullback in its stock price, presenting a potential buying opportunity for savvy investors. Despite a challenging fiscal year, with a net income from continuing operations showing a loss of $83.5M and EBITDA at a loss of $45.8M, the company's market capitalization remains robust at $262.7M. The company's total assets stand at $83.8M, with non-current assets making up a significant portion at $74.6M. This includes $21.3M in intangible assets and $20.6M in goodwill, indicating a strong brand and intellectual property value.Rekor's total liabilities are $34.5M, with short and long-term debt totaling $19.8M. The company's net debt stands at $17.8M, which is manageable given its current valuation of $278.9M. The company's shares are largely held by institutions, at 47.29%, with insiders owning 8.90%. This suggests a level of confidence in the company's long-term prospects. However, investors should be aware of the company's probability of bankruptcy standing at 42.22%, indicating a moderate level of risk. In conclusion, while Rekor Systems presents some financial challenges, the recent pullback in its stock price may offer a buying opportunity for risk-tolerant investors who believe in the company's long-term potential. .
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