RECON TECHNOLOGY LTD's gross profit margin for the third quarter of its fiscal year 2013 has increased when compared to the same period a year ago. Sales and net income fell significantly, underperforming compared to the average company in its industry. RECON TECHNOLOGY LTD has strong liquidity. Currently, the Quick Ratio is 1.88 which shows the ability to cover short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.
At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 3.56% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.
| Income Statement | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Net Sales ($mil) | 1.24 | 2.06 |
| EBITDA ($mil) | -0.32 | 0.0 |
| EBIT ($mil) | -0.35 | 0.02 |
| Net Income ($mil) | -0.2 | 0.02 |
| Balance Sheet | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Cash & Equiv. ($mil) | 1.04 | 0.37 |
| Total Assets ($mil) | 22.38 | 20.85 |
| Total Debt ($mil) | 2.58 | 2.53 |
| Equity ($mil) | 13.32 | 12.86 |
| Profitability | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Gross Profit Margin | 56.84 | 47.92 |
| EBITDA Margin | -25.99 | 0.0 |
| Operating Margin | -27.94 | 0.78 |
| Sales Turnover | 0.64 | 0.38 |
| Return on Assets | -0.13 | -6.98 |
| Return on Equity | -0.23 | -11.32 |
| Debt | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Current Ratio | 2.69 | 2.68 |
| Debt/Capital | 0.16 | 0.16 |
| Interest Expense | 0.1 | 0.04 |
| Interest Coverage | -3.45 | 0.44 |
| Share Data | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Shares outstanding (mil) | 3.95 | 3.95 |
| Div / share | 0.0 | 0.0 |
| EPS | -0.05 | 0.0 |
| Book value / share | 3.37 | 3.25 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 45769.0 | 97628.0 |
SELL. The price-to-book ratio of 0.53 indicates a significant discount versus the S&P 500 average of 2.44 and a significant discount versus the industry average of 2.89. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, RECON TECHNOLOGY LTD proves to trade at a discount to investment alternatives within the industry.
| Price/Earnings |
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Price/Cash Flow |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| RCON NA | Peers 22.07 | RCON 8.93 | Peers 18.26 | |||||||||||||||||||||
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Neutral. A lower P/E ratio can signify a less expensive stock or lower growth potential. Ratio not available. |
Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. RCON is trading at a significant discount to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
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| RCON NA | Peers 16.88 | RCON NA | Peers 1.44 | |||||||||||||||||||||
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Neutral. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth potential. Ratio not available. |
Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. Ratio not available. |
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| Price/Book |
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Earnings Growth |
|
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| RCON 0.53 | Peers 2.89 | RCON -100.00 | Peers -2.89 | |||||||||||||||||||||
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Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. RCON is trading at a significant discount to its peers. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, RCON is expected to significantly trail its peers on the basis of its earnings growth rate. |
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| Price/Sales |
|
Sales Growth |
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| RCON 0.49 | Peers 2.17 | RCON 77.93 | Peers 18.69 | |||||||||||||||||||||
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Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. RCON is trading at a significant discount to its industry on this measurement. |
Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share. RCON has a sales growth rate that significantly exceeds its peers. |
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