Precision Optics Corporation, Inc. (POCI) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B below the industry

Precision Optics's price-to-book of 2.72 is below the Surgical, Medical, and Dental Instruments and Supplies median of 3.22.

Trading below fair value

The share price of $5.05 is below our fair value estimate of $6.29.

Margin of safety under 20%

The price is 19.7% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 14.4% a year over the last three fiscal years.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 65.2% over the last twelve months; the Surgical, Medical, and Dental Instruments and Supplies median is 11.0%.

Guidance issued

The latest outlook (fiscal year 2027 revenue, Sep 28, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin slipping

Gross margin was 17.2% over the last twelve months, against 17.8% a year earlier.

Return on equity under 15%

Return on equity was -22.3% over the last twelve months and averaged -23.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was -23.0%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Precision Optics's return on equity of -22.3% is above the Surgical, Medical, and Dental Instruments and Supplies median of -31.3%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was -11.5% over the last twelve months, against a 5-year average of -12.8%.

Net margin above the industry

Precision Optics's net margin of -11.5% is above the Surgical, Medical, and Dental Instruments and Supplies median of -14.1%.

Low debt

Debt is 6.3% of shareholders' equity, under the 40% we consider low.

Debt rising against equity

Debt to equity rose from 0.0% five years ago to 6.3%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals -120% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense -23.7 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.28 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.19; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Precision Optics has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.