Universe Pharmaceuticals (UPC) AI Stock Analysis

• Market Cap: $1.68M
• Dividend Yield: N/A
• Average Volume (3M): 955.25K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.55
• Revenue Growth: -27.81%
• EPS Growth: N/A
• Country: US
• Employees: 225
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): N/A
• Shares Outstanding: 563,338
• 10 Day Avg. Volume: 2,486,504
• 30 Day Avg. Volume: 955,249
• PEG Ratio: <0.01
• Price to Book (P/B): <0.01
• Price to Sales (P/S): 0.00082
• P/FCF Ratio: >-0.01
• Enterprise Value/Market Cap: -13.45
• Enterprise Value/Revenue: -1.27
• Enterprise Value/Gross Profit: -3.59
• Enterprise Value/Ebitda: 7.75
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 46 Neutral
• Price Target: $3.00 ▼(-28.91% Downside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is primarily held back by weak financial performance (multi-year revenue decline, ongoing losses, and negative operating/free cash flow). Technicals also weigh on the rating due to a clear downtrend and negative momentum indicators. Valuation is mixed: a negative P/E reflects loss-making operations and no dividend yield is available, though the balance sheet’s low leverage provides some support.

Positive Factors

Low Leverage

Modest absolute debt and a low debt-to-equity ratio provide durable financial flexibility. With limited leverage the firm has more runway to fund operations, restructure costs or pursue strategic investments without immediate refinancing pressure, supporting near-term solvency while losses persist.

Gross Margin Recovery

A material improvement in gross margin suggests better product mix, pricing or cost control at the core level. Sustained higher gross margins improve the ability to achieve operating leverage as volumes stabilize, lowering the revenue threshold needed for profitability over the medium term.

Distribution Footprint & Market Focus

A broad provincial distribution network and focus on elderly-health products align with structural demographic demand in China. This scalable reach supports recurring sales, third-party distribution revenue and cross-selling opportunities that can underpin recovery if execution and demand stabilize.

Negative Factors

Multi-year Revenue Decline

A persistent top-line decline and four straight years of net losses indicate structural demand or competitive pressures. Shrinking revenue impairs scale, raises per-unit fixed costs, and reduces strategic optionality, making it harder to fund R&D or commercialization without a clear turnaround in demand.

Negative Cash Generation

Consistently negative operating and free cash flows show the business consumes cash rather than generating it, constraining reinvestment in growth and increasing reliance on external financing. This raises dilution and refinancing risk and limits the company's ability to execute longer-term strategies.

Dual-Class Governance Shift

Implementing a dual-class structure is a lasting governance change that can entrench insiders and weaken minority protections. Over the medium term this may deter institutional investors, reduce governance oversight, and complicate future equity raises or strategic deals that require broad shareholder support.

Universe Pharmaceuticals Business Overview & Revenue Model

Company Description

Universe Pharmaceuticals INC, a pharmaceutical company, engages in the manufacture, marketing, distribution, and sale of traditional Chinese medicine derivative products in China. It offers products for the treatment of common chronic health conditions in the elderly for physical wellness and longevity; and cold and flu medications. The company also distributes and sells third-party producers, including biomedical drugs, medical instruments, traditional Chinese medicine pieces products, and dietary supplements. Its customers include pharmaceutical companies, hospitals, clinics, and drugstore chains. The company was incorporated in 2019 and is based in Ji'An, China. Universe Pharmaceuticals INC is a subsidiary of Sununion Holding Group Limited.

How the Company Makes Money

Universe Pharmaceuticals generates revenue through multiple streams. The primary revenue model is based on the sale of pharmaceutical products, including both proprietary medications and partnerships in generic drug development. Additionally, UPC earns income through licensing agreements, where it collaborates with other pharmaceutical companies to co-develop drugs or grant rights for distribution. The company may also receive milestone payments and royalties based on the performance of its products in the market. Strategic partnerships with research institutions and industry players further enhance UPC's revenue potential by providing access to additional resources and expertise in drug development.

Universe Pharmaceuticals Financial Statement Overview

Summary

Overall financials are weak: revenue has contracted materially over multiple years and the company remains net-loss making with negative operating cash flow and free cash flow. Offsetting this, the balance sheet shows low leverage and 2025 saw margin improvement and reduced cash burn versus 2024.

Income Statement

Revenue has contracted for multiple years (down from ~$48.0M in 2021 to ~$17.9M in 2025), and profitability has deteriorated materially. The company has been net-loss making for four straight annual periods (2022–2025), with 2025 net margin still deeply negative (~-20.6%) despite improving versus 2024 (~-37.9%). Gross margin has rebounded in 2025 (~35.3%) from 2024 (~26.4%), but operating earnings remain negative, indicating cost structure and/or volume pressure still outweighs the margin recovery.

Balance Sheet

Leverage looks manageable, with debt-to-equity remaining low (~0.16 in 2025) and total debt modest (~$9.3M) relative to equity (~$56.1M). Assets are relatively stable (~$69.3M in 2025 vs. ~$68.0M in 2024). The main weakness is persistent negative returns on equity (2022–2025), reflecting ongoing losses and raising the risk that continued burn could erode the equity base over time despite currently conservative leverage.

Cash Flow

Cash generation is weak and volatile. Operating cash flow is negative in most recent years (2025: -$5.1M; 2024: -$9.5M), and free cash flow is also negative (2025: -$5.4M), implying the business is currently consuming cash rather than funding itself. While 2025 cash outflow improved versus 2024 (less negative) and free cash flow decline moderated, the overall pattern since 2021 shows inconsistent conversion and a reliance on external funding or balance sheet resources if losses persist.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	17.86M	23.02M	32.31M	40.14M	47.98M
Gross Profit	6.30M	6.07M	10.32M	21.89M	25.33M
EBITDA	-2.92M	-7.36M	-3.18M	-6.40M	14.20M
Net Income	-3.67M	-8.73M	-6.16M	-8.74M	11.32M
Balance Sheet
Total Assets	69.30M	67.95M	53.29M	59.54M	70.14M
Cash, Cash Equivalents and Short-Term Investments	33.59M	29.50M	18.50M	18.86M	21.80M
Total Debt	9.26M	7.99M	5.48M	3.94M	4.33M
Total Liabilities	13.17M	22.45M	13.75M	13.10M	11.21M
Stockholders Equity	56.13M	45.50M	39.53M	46.44M	58.93M
Cash Flow
Free Cash Flow	-5.40M	-9.87M	1.08M	-1.41M	-15.59M
Operating Cash Flow	-5.05M	-9.51M	1.12M	-1.31M	-2.06M
Investing Cash Flow	-341.81K	-361.29K	-44.17K	-3.91M	-27.06M
Financing Cash Flow	9.73M	33.95M	-1.39M	3.32M	26.58M

Universe Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPC, the sentiment is Negative. The current price of 4.22 is above the 20-day moving average (MA) of 3.69, above the 50-day MA of 3.95, and above the 200-day MA of 4.16, indicating a bearish trend. The MACD of -0.36 indicates Positive momentum. The RSI at 33.98 is Neutral, neither overbought nor oversold. The STOCH value of 19.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UPC.

Universe Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
RDHL	47 Neutral	$5.04M	―	―	―	―	―
UPC	46 Neutral	$1.68M	-0.30	2.66%	―	-27.81%	―
PRFX	44 Neutral	$2.26M	―	―	―	―	―
CPHI	42 Neutral	$3.08M	-0.59	-42.47%	―	-26.92%	69.90%
SHPH	32 Underperform	$3.42M	-0.05	-9999.00%	―	―	79.31%

Universe Pharmaceuticals Corporate Events

Universe Pharmaceuticals Sets February 13 Effective Date for Dual-Class Share Structure

Universe Pharmaceuticals INC, a Ji’an-based producer and distributor of traditional Chinese medicine derivatives and other pharmaceutical products across 30 Chinese provinces, has detailed its business focus on elderly patients’ health and general well-being. The company also acts as a distributor for biomedical drugs, medical instruments and dietary supplements made by other pharmaceutical firms.

On February 11, 2026, Universe Pharmaceuticals announced that all conditions for implementing its dual-class share structure had been satisfied, with the structure set to take effect on the Nasdaq Capital Market on February 13, 2026. Following amended and restated corporate documents, the firm’s authorized capital now comprises 1.8 billion Class A ordinary shares and 200 million Class B ordinary shares, while the Class A shares will continue to trade under the ticker UPC and the same CUSIP, signaling a governance and capital-structure shift that may consolidate control while preserving market trading continuity.

The most recent analyst rating on (UPC) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Universe Pharmaceuticals stock, see the UPC Stock Forecast page.