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Precision Optics Corporation (POCI)
NASDAQ:POCI
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Precision Optics Corporation
(NASDAQ:POCI)
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Rating:41Neutral
Price Target:
$4.00
▼(-7.83% Downside)
Precision Optics Corporation's overall stock score reflects significant financial and valuation challenges, with ongoing losses and liquidity issues. Technical analysis indicates weak momentum, further weighing on the stock's attractiveness. Despite positive future guidance, current operational inefficiencies and financial instability are major concerns.
Precision Optics Corporation (POCI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$33.56M
Dividend YieldN/A
Average Volume (3M)16.83K
Price to Earnings (P/E)―
Beta (1Y)0.50
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. Volume42,825
30 Day Avg. Volume16,829
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 Key Performance Indicators (KPIs)
Precision Optics Corporation Earnings Call Summary
Earnings Call Date:Sep 29, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Nov 13, 2025
Earnings Call Sentiment Neutral
While Precision Optics achieved record revenue and secured significant long-term contracts, the company faced notable challenges with gross margins, production issues, and increased costs. Despite these challenges, the outlook for fiscal 2026 is positive with expected revenue and margin growth.Q4-2025 Updates
Positive Updates
Record-Breaking Quarterly Revenue
Precision Optics achieved its highest quarterly revenue in company history at $6.2 million, leading to an annualized run rate of approximately $25 million.
Major Production Contracts
The company secured long-term contracts with a top-tier aerospace company and a surgical robotics company, providing increased visibility and confidence in future revenue growth.
Facility Expansion and Relocation
Precision Optics expanded its facilities by relocating its headquarters to Littleton, Massachusetts, and opening a new facility in South Portland, Maine, to support long-term growth.
Revenue and Margin Growth Forecast
For fiscal 2026, the company expects revenue to grow over 30% to $25 million and gross margins to recover to approximately 30% compared to 18% in 2025.
Increased Production Capacity
The company reported increasing production capacity for its aerospace program, with quarterly revenue growing from $300,000 in Q1 to just under $2 million in Q4.
Negative Updates
Gross Margin Challenges
The company faced gross margin challenges in Q3 and Q4 of fiscal 2025, primarily due to production yield issues, increased labor costs, and tariffs, resulting in margins of 13% in Q4.
Single-Use Cystoscope Production Issues
Production of the single-use cystoscope faced challenges, including zero gross margin in Q4, due to yield issues, labor costs, and tariffs.
Increased Net Loss
The company reported a net loss of $1.4 million for the quarter and $5.8 million for the year, compared to $3 million in the prior year.
Tariff Costs Impact
Tariff costs in Q4 alone were approximately $180,000, representing about 3% gross margin, significantly impacting overall profitability.
Company Guidance
During the Precision Optics Fourth Quarter and Fiscal Year 2025 Financial Results Conference Call, the company provided guidance for fiscal 2026, projecting revenues of approximately $25 million, marking a 30% increase from fiscal 2025. This growth is mainly attributed to a 75% increase in the systems manufacturing business, driven by expansions in aerospace and single-use cystoscope programs. Gross margins are expected to improve to around 30%, up from 18% in fiscal 2025, due to better manufacturing yields, tariff reimbursements, and elimination of low-margin revenues. The company aims to achieve positive adjusted EBITDA of $0.5 million for fiscal 2026. Additionally, Precision Optics is addressing operational challenges by hiring key personnel, including a new Chief Operating Officer, to support its growth and enhance manufacturing efficiency.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
4.55
Negative
4.62
Negative
4.61
Negative
Market Momentum
-0.07
Negative
45.28
Neutral
26.22
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 4.37, below the 50-day MA of 4.55, and below the 200-day MA of 4.61, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 45.28 is Neutral, neither overbought nor oversold. The STOCH value of 26.22 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 | $54.70M | 43.23 | 15.14% | ― | 21.16% | ― | |
53 Neutral | $27.55M | ― | -10.80% | ― | -0.24% | 50.45% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
50 Neutral | $27.27M | ― | -66.08% | ― | 133.00% | 29.69% | |
49 Neutral | $19.79M | ― | -138.36% | ― | -12.24% | -427.45% | |
45 Neutral | $25.68M | ― | -329.45% | ― | 98.61% | -1.98% | |
41 Neutral | $33.56M | ― | -51.78% | ― | -0.07% | -74.60% |
* Healthcare Sector Average
POCI
Precision Optics Corporation
4.34
0.09
2.12%
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FEMY
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0.65
-0.48
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NXGL
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2.67
-0.37
-12.17%
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.