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Precision Optics Corporation (POCI)
NASDAQ:POCI
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Precision Optics Corporation
(NASDAQ:POCI)
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Select Model
Rating:41Neutral
Price Target:
$4.00
▼(-7.83% Downside)
The overall stock score is primarily impacted by significant financial challenges, including declining revenues and negative profit margins. Technical analysis indicates bearish momentum, and valuation metrics are unattractive due to negative earnings. While the earnings call provided some positive future guidance, it was not enough to offset the current financial instability.
Precision Optics Corporation (POCI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$33.48M
Dividend YieldN/A
Average Volume (3M)10.98K
Price to Earnings (P/E)―
Beta (1Y)0.51
Revenue Growth-0.07%
EPS Growth-74.60%
CountryUS
Employees83
SectorHealthcare
Sector Strength45
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)-0.18
Shares Outstanding7,714,701
10 Day Avg. Volume24,948
30 Day Avg. Volume10,977
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)2.71
Price to Sales (P/S)0.00
P/FCF Ratio-8.82
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue1.99
Enterprise Value/Gross Profit11.15
Enterprise Value/Ebitda-7.11
Forecast
1Y Price Target
$4.00Price Target Upside-7.83% Downside
Rating ConsensusHold
Number of Analyst Covering0
Precision Optics Corporation Business Overview & Revenue Model
Company DescriptionPrecision Optics Corporation, Inc. designs, develops, manufactures, and sells specialized optical and illumination systems and related components primarily in the United States and the European Economic Area. It offers medical instrumentation products, including endoscopes and endocouplers, as well as other custom imaging and illumination products, such as Microprecision lenses and micro medical cameras, and 3D endoscopes for use in minimally invasive surgical procedures by hospitals and physicians. The company also provides components and assemblies for industrial and military use. It markets its products to medical device companies. The company was incorporated in 1982 and is based in Gardner, Massachusetts.
How the Company Makes MoneyPOCI generates revenue primarily through the sale of its optical components and systems to clients in the medical, defense, and industrial sectors. The company employs a business model that includes direct sales to end-users, long-term contracts with government agencies, and partnerships with other technology firms for co-development projects. Key revenue streams include custom optical solutions tailored to specific client needs, standard optical components sold in bulk, and maintenance and support services for installed systems. Significant partnerships with major players in the medical and defense industries enhance POCI's market reach and contribute to stable earnings through recurring contracts and collaborative development projects.
Precision Optics Corporation Earnings Call Summary
Earnings Call Date:Sep 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Nov 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a challenging quarter with significant operational hurdles impacting financial performance. However, the company's confidence in resolving these issues and its strong backlog and growth potential in upcoming quarters provide a balanced outlook.Q3-2025 Updates
Positive Updates
Production Backlog and Revenue Growth
The company has the largest production backlog in over 20 years, and overall systems production revenue increased over 20% quarter over quarter and more than doubled year over year. The company expects Q4 revenues to grow significantly from Q3 levels, aiming for $6 million in sales.
Aerospace Program Expansion
Production levels for the aerospace program have continued to ramp from approximately $300,000 in Q1 to $900,000 in Q3. The company expects production to set another new record in Q4 and has secured a purchase agreement with minimum annual purchase commitments of nearly $4 million for 2025 and 2026.
Launch and Positive Reception of Unity Platform
The Unity platform, launched in late January, received positive feedback and has increased website traffic by more than 15% since January. The company is in active discussions with five potential customers interested in Unity.
New Board Members
The company added two new board members with significant relevant experience: Buell Duncan and JJ Pellegrino.
Negative Updates
Operational Challenges and Financial Impact
Significant operational challenges led to lower revenue and margins, with a shortfall of approximately $600,000 in Q3 due to production issues. The gross margin dropped to 10% from 35% in the year-ago quarter, and the net loss was $2.1 million compared to a $317,000 net loss the previous year.
Production Issues with Single-Use Cystoscope
Production of the single-use cystoscope was halted due to yield issues, dropping daily yields to less than 50%, leading to a one-month shutdown and a delay in production recovery.
Increased R&D and SG&A Expenses
R&D spending increased due to investment in the Unity platform, and SG&A expenses rose primarily due to increased personnel costs, impacting overall financial performance.
Company Guidance
During the Precision Optics Third Quarter Fiscal Year 2025 Financial Results Conference Call, the company provided guidance focusing on various operational and financial metrics. Precision Optics faced significant production challenges in Q3, with daily yields on their single-use cystoscope product line dropping to below 50%, compared to historical yields of around 90%. This issue, along with production delays, resulted in a revenue shortfall of approximately $600,000 and a negative adjusted EBITDA of $1.3 million for the quarter. Despite these setbacks, the company expressed confidence in its recovery, highlighting a strong production backlog and a robust sales pipeline. Revenue for Q3 was $4.2 million, down from $5.2 million in the previous year, and gross margins were significantly impacted, dropping to 10% from 35% due to low yields and a production shutdown. Precision Optics expects to achieve $6 million in sales in Q4, driven by increased production levels and a strong demand, particularly in their aerospace and single-use programs. The company has also made strides in staffing, improving production yields, and plans to begin a second production line in fiscal 2026. With a positive response to the Unity platform and strong customer commitments, including a $4 million annual purchase agreement for 2025 and 2026, Precision Optics remains optimistic about future growth and achieving positive adjusted EBITDA in the upcoming quarter.Precision Optics Corporation Financial Statement Overview
Summary
Precision Optics Corporation faces significant financial challenges, with declining revenues and negative profit margins. The balance sheet shows a stable capital structure but poor profitability, and cash flow issues indicate liquidity problems.Income Statement
The income statement reveals significant challenges, with a complete revenue drop in the TTM period. Historical data shows negative profit margins and declining revenue growth, indicating financial instability and operational inefficiencies.20
Very Negative
Balance Sheet
The balance sheet shows a low debt-to-equity ratio, suggesting conservative leverage. However, the return on equity is negative, reflecting poor profitability. The equity ratio is stable, indicating a solid capital structure despite operational losses.45
Neutral
Cash Flow
Cash flow analysis highlights negative operating and free cash flows, with a declining trend in free cash flow growth. The ratios indicate that cash flows are insufficient to cover net income, pointing to liquidity issues.30
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.09M | 19.09M | 19.10M | 21.04M | 15.68M | 10.67M |
| Gross Profit | 3.40M | 3.40M | 5.80M | 7.73M | 4.93M | 3.43M |
| EBITDA | -5.34M | -5.34M | -2.51M | 286.99K | -526.57K | 50.18K |
| Net Income | -5.78M | -5.78M | -2.95M | -144.61K | -928.42K | -102.83K |
Balance Sheet | ||||||
| Total Assets | 19.79M | 19.79M | 16.91M | 19.74M | 16.70M | 6.26M |
| Cash, Cash Equivalents and Short-Term Investments | 1.77M | 1.77M | 405.28K | 2.93M | 605.75K | 861.65K |
| Total Debt | 2.04M | 2.04M | 3.43M | 3.16M | 3.00M | 251.99K |
| Total Liabilities | 7.53M | 7.53M | 6.84M | 7.69M | 7.73M | 2.83M |
| Stockholders Equity | 12.26M | 12.26M | 10.07M | 12.05M | 8.97M | 3.43M |
Cash Flow | ||||||
| Free Cash Flow | -3.77M | -3.77M | -2.98M | -133.59K | -1.09M | -75.85K |
| Operating Cash Flow | -3.55M | -3.55M | -2.68M | -81.09K | -933.37K | 46.55K |
| Investing Cash Flow | -233.47K | -233.47K | -293.88K | -52.50K | -407.80K | -289.06K |
| Financing Cash Flow | 5.15M | 5.15M | 456.32K | 2.45M | 1.09M | -30.53K |
Precision Optics Corporation Technical Analysis
Negative
4.34
Price Trends
4.61
Negative
4.64
Negative
4.63
Negative
Market Momentum
-0.07
Negative
40.40
Neutral
21.09
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For POCI, the sentiment is Negative. The current price of 4.34 is below the 20-day moving average (MA) of 4.40, below the 50-day MA of 4.61, and below the 200-day MA of 4.63, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 40.40 is Neutral, neither overbought nor oversold. The STOCH value of 21.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for POCI.
Precision Optics Corporation Risk Analysis
Precision Optics Corporation disclosed 33 risk factors in its most recent earnings report. Precision Optics Corporation reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Changes in U.S. Tariff Policy and Related Trade Actions Could Adversely Affect Our International Supply Chain, Costs, and Competitive Position Q1, 2025
Precision Optics Corporation Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $48.97M | 36.99 | 0.86% | ― | 21.16% | ― | |
51 Neutral | $25.12M | -2.80 | -11.43% | ― | -0.24% | 50.45% | |
50 Neutral | $25.83M | -6.03 | -57.01% | ― | 133.00% | 29.69% | |
49 Neutral | $19.94M | -0.34 | -364.88% | ― | -12.24% | -427.45% | |
44 Neutral | $16.15M | -0.44 | -816.54% | ― | 98.61% | -1.98% | |
41 Neutral | $33.48M | ― | -51.78% | ― | -0.07% | -74.60% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
POCI
Precision Optics Corporation
4.34
-0.44
-9.21%
HBIO
Harvard Bioscience
0.46
-1.94
-80.83%
RVP
Retractable Technologies
0.86
0.11
14.67%
NEPH
Nephros
4.64
3.06
193.67%
FEMY
Femasys
0.41
-0.70
-63.06%
NXGL
NexGel Inc
2.42
-0.09
-3.59%
Precision Optics Corporation Corporate Events
Business Operations and Strategy
Precision Optics Signs New Lease Agreement
Neutral
Jun 3, 2025
On June 2, 2025, Precision Optics Corporation entered into a lease agreement for approximately 19,590 square feet of commercial space in Littleton, Massachusetts. The lease, which has an initial term of 7.5 years starting around August 1, 2025, includes options for two additional five-year extensions. The company will benefit from a six-month rent abatement and has a right of first offer on adjacent space. The landlord is responsible for tenant improvements, with penalties for delays, and the company can terminate the lease if occupancy is not granted by January 1, 2026.
Executive/Board ChangesShareholder Meetings
Precision Optics Holds Annual Stockholders Meeting
Neutral
May 23, 2025
On May 20, 2025, Precision Optics Corporation held its annual meeting of stockholders, where key proposals were voted upon. The meeting resulted in the election of directors, approval of executive compensation, and ratification of the appointment of Stowe & Degon, LLC as the independent registered public accounting firm for the fiscal year ending June 30, 2025.
Business Operations and Strategy
Precision Optics Signs New Lease Agreement in Maine
Positive
May 20, 2025
On May 14, 2025, Precision Optics Corporation entered a lease agreement for 8,750 square feet of commercial space in South Portland, Maine, with an anticipated commencement date of August 1, 2025. The lease includes an initial term of eight years with options to extend, and features such as abated rent for the first five months, annual rent increases, and a tenant improvement allowance, indicating a strategic move to enhance operational capacity.
Business Operations and Strategy
Precision Optics Signs Lease Extension with Texzona
Neutral
May 19, 2025
On May 13, 2025, Precision Optics Corporation entered into a First Lease Extension Agreement with Texzona Industries, Inc. to continue leasing approximately 9,375 square feet of commercial space in El Paso, Texas. The lease extension, commencing on June 1, 2025, and ending on May 31, 2028, includes annual base rents of $49,219, $50,695, and $52,216, with additional responsibilities for taxes, insurance, and common area maintenance, resulting in an estimated monthly payment of $5,773.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.