Universe Pharmaceuticals (UPC) AI Stock Analysis

• Market Cap: $2.48M
• Dividend Yield: N/A
• Average Volume (3M): 955.25K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.21
• 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: -8.74
• Enterprise Value/Revenue: -1.22
• Enterprise Value/Gross Profit: -3.45
• Enterprise Value/Ebitda: 7.43
• 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: 51 Neutral
• Price Target: $4.50 ▲(6.64% Upside)

The score is held back primarily by weak financial performance (multi-year revenue contraction, sustained losses, and negative operating/free cash flow), partially offset by a conservative balance sheet and improving 2025 margins/cash burn. Technicals provide a modest tailwind with price above key moving averages and neutral momentum indicators, while valuation is constrained by the negative P/E and lack of dividend yield.

Positive Factors

Conservative leverage

Low leverage and modest absolute debt provide durable financial flexibility, lowering refinancing and covenant risk. This gives management time to execute turnaround actions, reduces interest burden, and supports operations across a multi-month horizon even while earnings recover.

Improving gross margin and cash burn

A materially higher gross margin and reduced cash outflow in 2025 indicate structural operational improvements (pricing mix, cost control or manufacturing efficiencies). If sustained, these improvements improve operating leverage and meaningfully narrow the path to sustainable profitability over the next several quarters.

Stable asset base

A steady asset base suggests limited recent impairment or aggressive write-downs, preserving replacement value and optionality. Stable assets support ongoing operations and licensing/manufacturing capabilities, reducing disruptive capital restructuring risk during a medium-term turnaround.

Negative Factors

Multi-year revenue decline

A sustained top-line contraction materially reduces scale, weakens pricing power, and impairs fixed-cost absorption. Over months, declining revenue constrains margin recoveries and narrows pathways to profitability absent product, commercial, or market-structure fixes.

Sustained net losses

Four consecutive years of net losses signal persistent structural profitability issues. Continued losses erode equity, force reliance on external funding, and limit reinvestment, increasing the probability that operational changes or financing actions will be required within a medium-term window.

Negative operating and free cash flow

Persistent negative operating and free cash flow mean the business is consuming cash rather than self-funding. Even with improvement, continued cash burn necessitates external financing or asset draws, creating execution and dilution risk that can pressure strategic options over the next several quarters.

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

Operating fundamentals are weak: revenue has fallen materially over multiple years and the company has posted net losses for four straight years with negative operating cash flow and free cash flow. Offsetting this somewhat, leverage is low and 2025 showed improving gross margin 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	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	17.86M	17.86M	23.02M	32.31M	40.14M	47.98M
Gross Profit	6.30M	6.30M	6.07M	10.32M	21.89M	25.33M
EBITDA	-2.92M	-2.92M	-7.36M	-3.18M	-6.40M	14.20M
Net Income	-3.67M	-3.67M	-8.73M	-6.16M	-8.74M	11.32M
Balance Sheet
Total Assets	69.30M	69.30M	67.95M	53.29M	59.54M	70.14M
Cash, Cash Equivalents and Short-Term Investments	33.59M	33.59M	29.50M	18.50M	18.86M	21.80M
Total Debt	9.26M	9.26M	7.99M	5.48M	3.94M	4.33M
Total Liabilities	13.17M	13.17M	22.45M	13.75M	13.10M	11.21M
Stockholders Equity	56.13M	56.13M	45.50M	39.53M	46.44M	58.93M
Cash Flow
Free Cash Flow	-5.32M	-5.40M	-9.87M	1.08M	-1.41M	-15.59M
Operating Cash Flow	-5.05M	-5.05M	-9.51M	1.12M	-1.31M	-2.06M
Investing Cash Flow	-341.81K	-341.81K	-361.29K	-44.17K	-3.91M	-27.06M
Financing Cash Flow	9.73M	9.73M	33.95M	-1.39M	3.32M	26.58M

Universe Pharmaceuticals Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UPC, the sentiment is Positive. The current price of 4.22 is below the 20-day moving average (MA) of 4.27, above the 50-day MA of 4.07, and below the 200-day MA of 4.23, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 56.09 is Neutral, neither overbought nor oversold. The STOCH value of 67.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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%
UPC	51 Neutral	$2.48M	-0.45	2.66%	―	-27.81%	―
RDHL	47 Neutral	$5.86M	―	―	―	―	―
PRFX	44 Neutral	$2.64M	―	―	―	―	―
CPHI	42 Neutral	$4.52M	-0.88	-42.47%	―	-26.92%	69.90%
SHPH	32 Underperform	$2.87M	-0.08	-9999.00%	―	―	79.31%