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ZYBERNO

Stock Report

Updated Sep 1, 2026

Recon Technology, Ltd (RCON)

Energy • NASDAQ

$1.54

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

22.0/100

POOR BUSINESS

Recon Technology, Ltd (RCON) scores 22/100 — concerning metrics indicating significant structural or financial risks.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full RCON quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

-100.0%

Overvalued

Growth gap unavailable — insufficient data for reverse DCF calculation.

🎯 Expected Annual Return →

-59.2%

Margin of Safety convergence — your return if the market re-prices to intrinsic value (5-yr annualised)

-3.1%

Yield + growth — what the business alone earns you, even if the market never re-rates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full RCON valuation analysis · → View full RCON Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (-63.1%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.12x)

Operating Margin (Operational Efficiency):CRITICAL (-170.0%)

Return on Capital (Capital Efficiency):CRITICAL (-52.9%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

Recon Technology, Ltd (RCON) stock report — Zyberno Score 22/100 (POOR BUSINESS), Margin of Safety -100.0%, -59% expected annual return. Full financial analysis on Zyberno.

According to Zyberno's DCF model, Recon Technology, Ltd (RCON) trades at $1.54 against an estimated intrinsic value per share of $0.00 — a -100.0% Margin of Safety based on Owner Earnings of $14.47K TTM, projected at -21.5% growth for 10 years with a 2.5% terminal growth rate. Zyberno's model translates this into a 5-year expected return of -59.2% annually.

Over the trailing twelve months, RCON generated $14.47K in Owner Earnings. Capital was deployed as follows: $38.45K invested in capital expenditures. Reinvestment rate: 7.3%. Owner Earnings have declined at 21.5% annually over the trailing five years using log-linear regression.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:1.54

Market Cap:$115.82M

Valuation Multiples (3)

P/B Ratio:16.76x

P/S Ratio:36.05x

Peg Ratio:-999.00x

Enterprise Metrics (1)

Enterprise Value:$116.65M

Price Action & Momentum (2)

Momentum Percentile:1 / 100

% of 52-Week High:97.8%

B. Profitability Assessment

Return Metrics (5)

ROE:

-63.1%

📊 Click to view full RCON ROE analysis →

ROA:-38.3%

Roic:

-52.9%

📊 Click to view full RCON ROIC analysis →

Reinvestment Rate:7.3%

Fundamental Growth Rate (g):-3.9%

Margin Analysis (3)

Operating Margin Ttm:-170.0%

Net Margin Ttm:-173.6%

Ebitda Margin:-165.9%

TTM Performance (3)

Gross Margin Ttm:13.2%

Operating Margin Ttm:-170.0%

Net Margin Ttm:-173.6%

Yield Metrics (3)

Earnings Yield:-$26.29K

Owner Earnings Yield:$0.78

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

+1.35

📊 Click to view full RCON Earnings Surprise analysis →

EPS Surprise vs Expected:51.6%

Latest Earnings Filed:2016-11-14

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):-15.8%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):49.2%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):-47.0%

Operating Cash Flow Growth Rate (Linear):-20.7%

Operating Growth (Linear) (1)

Operating Income Growth Rate (Linear):-47.5%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:2.36x

Quick Ratio:2.15x

Cash Ratio:0.02x

Leverage Analysis (3)

Debt To Equity Ttm:0.12x

Debt-to-Equity Ratio:0.12x

Debt To Ebitda:-999.00x

Coverage Ratios (2)

Interest Coverage Ratio:-71.25x

Times Interest Earned:-71.25

Capital Structure (4)

Working Capital:6,169,899.00

Cash And Cash Equivalents:83,150.00

Long Term Debt:$445.58K

Net Debt:$828.05K

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $3.21M

Linear Growth: -15.8%

📊 Click to view full RCON Revenue analysis & methodology →

Cost Of Revenue Ttm:$5.84M

Profitability Breakdown (2)

Gross profit TTM: $422.83K

Linear Growth: -41.6%

📊 Click to view full RCON Gross Profit analysis & methodology →

Operating income TTM: -$5.46M

Linear Growth: -47.5%

📊 Click to view full RCON Operating Income analysis & methodology →

Bottom Line Performance (3)

Net income TTM: -$5.58M

Linear Growth: 49.2%

📊 Click to view full RCON Net Income analysis & methodology →

Income Before Tax:-$5.47M

Ebitda Ttm:-5,328,960.00

Operating Expenses (5)

Operating Expenses:6,653,873.00

R And D Expense:842,495.00

Sga Expense:2,801,850.00

Income Tax Expense:-$52.09K

Interest Expense:112,301.98

Expense Ratios (3)

R And D To Revenue Percentage:72.9%

Sga To Revenue Percentage:242.4%

Ebitda Margin:-165.9%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$11.45M

Current Assets:$10.71M

Ppe Net:403,463.51

Goodwill:700,745.07

Intangible Assets:$881.49K

Liability Structure (4)

Total Liabilities:9,899,925.00

Current Liabilities:4,538,097.00

Long Term Debt:$445.58K

Short Term Debt:$465.62K

Equity & Capital (3)

Equity:$6.91M

Retained Earnings:-$10.40M

Common Stock:100,000,000.00

Working Capital Items (3)

Accounts Receivable:5,587,178.00

Inventory:950,379.00

Accounts Payable:28,633.35

Special Items (2)

Contract Liabilities:34,250.12

Stock Based Compensation:291,360.19

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $54.13K

Linear Growth: -20.7%

Free cash flow TTM: $15.68K

Linear Growth: -47.0%

📊 Click to view full RCON Free Cash Flow analysis & methodology →

Investment Activities (2)

Investing Cash Flow:-$1.10K

Capital Expenditures Ttm:-38,454.89

Financing Activities (3)

Financing Cash Flow:$372.15K

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:133,681.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):-6.52

Eps diluted TTM: -$6.52

Linear Growth: 100.0%

📊 Click to view full RCON EPS analysis & methodology →

Earnings Per Share Ttm:-$0.07

Revenue & Cash Per Share (2)

Sales Per Share Ttm:0.04

Operating Cash Flow Per Share:-$0.06

Book Value & Capital (2)

Book Value Per Share:$0.09

Cash Per Share:0.00

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.22x

Working Capital Turnover Ttm:0.52x

Receivables Management (2)

Receivables Turnover Ttm:0.58x

Days Sales Outstanding Ttm:634.70

Inventory Management (2)

Inventory Turnover Ttm:6.15x

Days Inventory Outstanding Ttm:59.36

Payables & Cash Cycle (2)

Days Payable Outstanding:1.79

Cash Conversion Cycle:692.27

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:100.00

Quality Score:40.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $14.47K

Linear Growth: -21.5%

📊 Click to view full RCON Owner Earnings analysis & methodology →

Owner Earnings Per Share:$0.00

Owner Earnings Yield:$0.78

Growth Assessment (1)

Owner Earnings Growth Rate:-$21.51

Damodaran Growth Analysis (2)

Reinvestment Rate:7.3%

Fundamental Growth Rate (g):-3.9%

Intrinsic Value Models (1)

Intrinsic Value:

$64.53K

📊 Click to view full RCON DCF valuation →

Margin of Safety (1)

Margin Of Safety:

-100.0%

📊 Click to view full RCON valuation analysis →

Return Scenarios (2)

Theoretical 5-Year Return:

-59.2%

📊 Click to view full RCON expected return analysis →

Forward Expected Return (Yield + Growth):

-3.1%

📊 Click to view full RCON expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (3)

Revenue Growth Rate (Linear):-15.8%

Net Income Growth Rate (Linear):49.2%

Operating Income Growth Rate (Linear):-47.5%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):-47.0%

Operating Cash Flow Growth Rate (Linear):-20.7%

Other Growth Rates (3)

Gross Profit Growth Rate (Linear):-41.6%

Book Value Growth Rate (Linear):-16.1%

Owner Earnings Growth Rate:-$21.51

C. Company Profile & Context

Corporate Information (6)

Symbol:RCON

Company Name:Recon Technology, Ltd

Sector:Energy

Industry:Oil & Gas Services

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:penny

Volume Category:N/A

Share Structure (3)

Shares Outstanding:75.21M

Shares Outstanding Basic:5.98M

Shares Outstanding Diluted:5.65M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-09-01 02:32:15 UTC

Data Timestamp:2026-08-20T09:34:25.011211