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Rekor Systems Overview
The sharp rise in the S&P 500 (SP500) in 2024 was attributed mostly to the “Magnificent 7” stocks, which form a huge chunk of the index. But as 2025 begins and these momentum stocks sell
Rekor Systems: Undeniable Momentum In This Under-Recognized Tech Vendor
Summary
- The sharp rise in the S&P 500 in 2024 was driven by the 'Magnificent 7' stocks, but small-cap growth stocks like Rekor Systems, Inc. offer better opportunities for 2025.
- Rekor Systems, specializing in “roadside intelligence,” has seen a 40% decline in shares over the past year but shows strong potential with new public-sector deals and double-digit revenue growth.
- The company recently signed a pilot deal with the state of New York. It's also cutting annual costs by $15 million (roughly 1/3 of annual revenue).
- Trading at <3x forward revenue despite double-digit growth, Rekor could enjoy a re-rating to market average multiples (5-7x) for software companies if it shows more steady execution.
- Initiating REKR stock at a buy rating, but note that this is a high-risk, high-reward play (be mindful of the company's limited liquidity and its lumpy quarterly results).
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in REKR over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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