Universal Security Instruments (UUU) AI Stock Analysis

• Market Cap: $13.83M
• Dividend Yield: N/A
• Average Volume (3M): 269.92K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.27
• Revenue Growth: -23.22%
• EPS Growth: N/A
• Country: US
• Employees: 11
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): -0.99
• Shares Outstanding: 2,717,787
• 10 Day Avg. Volume: 167,235
• 30 Day Avg. Volume: 269,921
• PEG Ratio: -0.04
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.17
• P/FCF Ratio: -3.93
• Enterprise Value/Market Cap: 0.54
• Enterprise Value/Revenue: 0.69
• Enterprise Value/Gross Profit: 2.08
• Enterprise Value/Ebitda: -2.88
• 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: $4.00 ▼(-21.72% Downside)
• Action: Reiterated Date: 02/20/26
• Date: Action: Reiterated 02/20/26

The score is held down primarily by weak financial performance (sharp TTM revenue decline and losses) and bearish technicals (negative MACD and price below key moving averages). A low P/E provides some valuation support, but negative corporate-event implications around reduced capital-structure flexibility add risk.

Positive Factors

Diverse sales channels

A multi-channel go-to-market model (retail, distribution, and OEM/private-label) diversifies revenue sources and reduces reliance on any single buyer. Over 2-6 months this supports steadier unit demand from replacement cycles, retailer restocking, and recurring OEM supply contracts.

Low leverage (zero TTM debt)

Zero trailing-twelve-month debt materially lowers solvency and interest expense risks, preserving financial flexibility to fund operations or opportunistic investments. This durable balance-sheet strength reduces near-term bankruptcy risk and supports resilience through revenue cyclicality.

Positive operating/free cash flow

Recent positive operating and free cash flow indicates the business can generate internal liquidity to cover working capital and modest investments without immediate external financing. Sustained cash generation improves funding optionality and supports ongoing product supply and distribution.

Negative Factors

Sharp revenue decline

A pronounced 33.7% TTM revenue drop and recurring loss years signal weakening demand or competitive/operational pressures. Persistent top-line contraction undermines scale economics, pressures margins, and limits ability to consistently fund R&D, marketing, or channel support over the medium term.

Volatile free cash flow

An 83% decline in free cash flow and a history of negative FCF years point to unstable internal funding. This volatility constrains capital allocation, increases reliance on external financing, and raises the risk the firm cannot sustainably fund inventory, OEM commitments, or necessary capex without dilutive or costly financing.

Restricted capital-structure flexibility

Shareholder rejection of amendments to authorized shares, preferred stock, and class B voting reduces management's toolkit for raising non-dilutive capital or structuring financing. Over months this limits strategic financing options and hampers rapid responses to liquidity needs or acquisition opportunities.

Universal Security Instruments Business Overview & Revenue Model

Company Description

Universal Security Instruments, Inc., together with its subsidiary, designs, markets, and distributes safety and security products for use in homes and businesses in the United States and internationally. It offers a line of safety alarms, including units powered by replaceable batteries, sealed batteries, and battery backup alarms; and smoke alarms, which include hearing impaired and heat alarms, as well as carbon monoxide alarms, door chimes, ventilation products, ground fault circuit interrupters, and other electrical devices under the UNIVERSAL and USI Electric trade names. The company provides its products to wholesale distributors; chain, discount, and television retailers; home center stores; catalog and mail order companies; electrical and lighting distributors, and manufactured housing companies; and other distributors. It also sells its products through independent sales organizations and sales representatives, as well as through its own sales catalogs and brochures, and website. The company was incorporated in 1969 and is headquartered in Owings Mills, Maryland.

How the Company Makes Money

Universal Security Instruments generates revenue through the sale of its safety and security products to various customer segments, including homeowners, commercial property operators, and distributors. The company primarily earns money by manufacturing and selling smoke and carbon monoxide alarms, which are distributed through retail, wholesale, and original equipment manufacturer (OEM) channels. Key revenue streams include direct sales to consumers via retail outlets and partnerships with distributors who supply these products to other businesses. The company's earnings are influenced by factors such as product demand, regulatory requirements for safety devices, and strategic partnerships that expand its market reach.

Universal Security Instruments Financial Statement Overview

Summary

Income statement weakness is the main drag: TTM revenue fell sharply (-33.7%) and profitability slipped into losses, showing inconsistent earnings power. Offsetting factors include a comparatively safer balance sheet with zero TTM debt and positive TTM operating/free cash flow (~$1.0M), though cash flow history and recent FCF drop (-83.2%) signal volatility.

Income Statement

Results have turned materially weaker in TTM (Trailing-Twelve-Months), with revenue down sharply (-33.7%) and profitability slipping into losses (negative operating profit and a small net loss). While gross margin remains fairly steady around the low-30% range, operating costs are pressuring earnings. The longer-term record is mixed—profitable years (2023, 2025 annual) are interrupted by loss years (2022, 2024, and TTM), pointing to inconsistent earnings power.

Balance Sheet

Leverage looks manageable overall, highlighted by zero debt in TTM (Trailing-Twelve-Months), which reduces financial risk. That said, the capital structure has fluctuated meaningfully over time (debt-to-equity ranged from ~0.20 to ~0.80 in recent annual periods), suggesting balance sheet strategy and/or funding needs are not fully stable. Equity remains positive, providing a cushion, but the smaller asset base in TTM alongside the operating downturn is a watch item.

Cash Flow

Cash generation is currently a relative bright spot: TTM (Trailing-Twelve-Months) shows positive operating and free cash flow (~$1.0M). However, free cash flow has fallen steeply versus the prior period (-83.2% growth), and the historical pattern is volatile with negative operating/free cash flow in multiple years (notably 2022 and 2025 annual). Overall, cash flow resilience is improving recently, but consistency remains a key weakness.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	10.83M	23.56M	19.52M	22.18M	19.55M	17.52M
Gross Profit	3.60M	6.83M	5.60M	6.35M	6.03M	5.64M
EBITDA	-2.60M	566.17K	-372.13K	1.14M	248.51K	300.06K
Net Income	-174.08K	500.68K	-695.79K	720.41K	-78.15K	268.34K
Balance Sheet
Total Assets	5.50M	9.82M	8.33M	8.40M	11.52M	7.50M
Cash, Cash Equivalents and Short-Term Investments	4.29M	348.07K	65.08K	151.50K	438.74K	160.60K
Total Debt	0.00	2.11M	940.92K	1.78M	3.71M	1.27M
Total Liabilities	3.23M	4.65M	3.67M	3.04M	6.88M	2.78M
Stockholders Equity	2.27M	5.16M	4.66M	5.36M	4.64M	4.72M
Cash Flow
Free Cash Flow	1.04M	-1.05M	604.08K	1.49M	-1.86M	1.39M
Operating Cash Flow	1.04M	-1.05M	604.08K	1.49M	-1.86M	1.39M
Investing Cash Flow	4.50M	0.00	0.00	0.00	0.00	0.00
Financing Cash Flow	-1.31M	1.33M	-690.50K	-1.78M	2.14M	-1.32M

Universal Security Instruments Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.11
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UUU, the sentiment is Positive. The current price of 5.11 is above the 20-day moving average (MA) of 4.63, above the 50-day MA of 4.91, and above the 200-day MA of 3.98, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 56.39 is Neutral, neither overbought nor oversold. The STOCH value of 89.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UUU.

Universal Security Instruments Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
VRME	58 Neutral	$11.86M	-2.50	-44.14%	―	-14.21%	-20.44%
BKYI	48 Neutral	$7.09M	-0.64	-143.60%	―	-1.19%	86.72%
UUU	46 Neutral	$13.83M	-67.60	26.86%	―	-23.22%	―
SUGP	44 Neutral	$7.51M	-2.57	-4.31%	―	―	―

Universal Security Instruments Corporate Events

Universal Security Converts Debt to Equity Through Share Issuance

Between January 26 and February 3, 2026, Universal Safety Products, Inc. issued 405,000 shares of common stock upon the conversion of approximately $1.5 million in principal and accrued interest under a convertible note, using a private placement exemption from registration under U.S. securities laws. Following these conversions, the company’s total outstanding common shares increased to 2,717,887 as of February 3, 2026, signaling a shift of debt into equity and resulting dilution for existing shareholders while strengthening the company’s balance sheet by reducing note obligations.

The most recent analyst rating on (UUU) stock is a Hold with a $5.50 price target. To see the full list of analyst forecasts on Universal Security Instruments stock, see the UUU Stock Forecast page.

Universal Security Instruments Shareholder Proposals Rejected

Universal Safety Products, Inc., a Maryland corporation, held an Adjourned Meeting on December 16, 2025, following previous adjournments, to vote on four key proposals related to amendments in the company’s Articles of Incorporation. These proposals included increasing authorized shares, authorizing preferred stock, authorizing class B common stock, and eliminating super-majority voting requirements. However, all four proposals were rejected by the stockholders, which may impact the company’s ability to implement strategic changes in its capital structure.