Precision Optics Corporation, Inc. (POCI) AI Stock Analysis
POCI AI stock analysis summary
AI ResearchPrecision Optics Corporation, Inc. (POCI) designs and manufactures advanced optical and illumination systems primarily for the medical industry. In FY2026, revenue surged 65.2% to $31.5M, supported by a 5-year revenue CAGR of 24.2%. However, the company remains unprofitable, reporting a net income of -$3.6M and free cash flow of -$2.0M in FY2026.
- Market cap
- $47.4M
- Revenue (TTM)
- $31.5M
- P/E
- —
- 1Y return
- 3.8% S&P 500 16.8%
- Avg. target
- $8.00 85.2% vs last close
Bull case
- FY2026 revenue increased 65.2% to $31.5M, driven by strong quarterly revenue growth of 42.0% year-over-year in the period ending June 30, 2026.
- The company holds net cash of $5.8M with $9.8M in cash and short-term investments and a low debt-to-equity ratio of 0.20.
- The mean price target from analysts of $8.00 indicates potential upside of 85.2% relative to the last close of $4.32.
Bear case
- Precision Optics has generated negative annual free cash flow for five consecutive years, including -$2.0M in FY2026.
- Gross margins contracted from 36.8% in FY2023 to 17.2% in FY2026, leading to an operating margin of -11.1%.
- Shareholder dilution has been substantial, with the company's share count increasing 54.4% over five years.
What Precision Optics does
Precision Optics Corporation, Inc. specializes in the design, development, manufacturing, and distribution of advanced optical and illumination systems and related components across the United States and the European Economic Area. Primarily serving the medical sector, the company provides endoscopes, endocouplers, and custom imaging solutions like Microprecision lenses and micro medical cameras for minimally invasive surgical procedures. Beyond healthcare, it manufactures components and assemblies for industrial and military purposes. Headquartered in Gardner, Massachusetts, the company was incorporated in 1982 and caters to medical device companies requiring specialized optical technologies.
Growth and profitability
Revenue expanded from $15.7M in FY2022 to $31.5M in FY2026, registering a 5-year CAGR of 24.2%. After experiencing revenue declines of 9.2% in FY2024 and 0.1% in FY2025, top-line growth rebounded by 65.2% in FY2026. For the latest quarter ended June 30, 2026, quarterly revenue grew 42.0% year-over-year. Operating performance has faced margin pressures, with gross margin narrowing from 31.4% in FY2022 to 17.2% in FY2026. Precision Optics recorded an operating margin of -11.1% and a net income of -$3.6M in FY2026, compared to a net income of -$5.8M in FY2025.
Balance sheet and cash flow
As of June 30, 2026, Precision Optics held $9.8M in cash and short-term investments against total debt of $4.1M, yielding net cash of $5.8M. The company maintains a current ratio of 2.28 and a debt-to-equity ratio of 0.20, with shareholders' equity standing at $20.3M out of $32.3M in total assets. In FY2026, operating cash flow was -$1.6M and capital expenditures were $426,786, resulting in free cash flow of -$2.0M. Share count increased 54.4% over five years.
Valuation and performance
Precision Optics trades at an enterprise value of $43.8M and a market capitalization of $47.4M. Its price-to-sales multiple is 1.5x, which sits below the median of 4.1x for its US-listed Healthcare peers. Its EV-to-EBITDA stands at 129.5x compared to the peer median of 12.0x, alongside a price-to-book ratio of 2.5x. Over the past year, POCI shares returned 3.8%, trailing the S&P 500 (SPY) return of 16.8%. Over a 5-year period, the stock declined 34.5% versus an 83.0% gain for the benchmark.
What analysts expect
One analyst covers Precision Optics with a Strong Buy rating. The mean price target is $8.00, representing an 85.2% premium over the last close of $4.32 on October 16, 2026. For the current fiscal year ending June 30, 2027, consensus estimates project revenue of $31.5M and an EPS of -$0.30, reflecting an EPS growth estimate of 30.2%. For the following fiscal year, 1 analyst projects revenue of $35.7M and EPS of $0.03. Precision Optics beat EPS estimates in 2 of the last 4 quarters, with next earnings scheduled for November 12, 2026.
Key risks and what to watch
- Continued operational losses, evidenced by an FY2026 net income of -$3.6M and EPS of -$0.47, present ongoing cash burn challenges.
- Gross margin deterioration to 17.2% in FY2026 may hinder the path toward achieving the projected $0.03 EPS for FY2028.
- The company's EV-to-EBITDA multiple of 129.5x is elevated relative to the US-listed Healthcare median of 12.0x.
- Long-term stock performance has lagged the market significantly, with a 5-year return of -34.5% compared to 83.0% for the S&P 500.
AI-generated research summary. Written with AI from Quotelinks data as of October 16, 2026 and checked so every figure matches that data. For information only, not investment advice. Disclaimer
About this POCI AI stock analysis
This page is an AI-written research summary of Precision Optics Corporation, Inc. (POCI). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.
Related: POCI income statement, POCI balance sheet, POCI key metrics, POCI analyst forecast, POCI chart. See the POCI stock overview for the latest quote and news.
POCI AI stock analysis FAQ
What is Precision Optics Corporation's primary business?
Precision Optics Corporation designs, develops, and manufactures advanced optical and illumination systems such as endoscopes, micro medical cameras, and Microprecision lenses. It primarily supplies medical device manufacturers for minimally invasive surgery, while also serving industrial and military markets.
Is Precision Optics Corporation profitable?
No, the company reported a net income of -$3.6M and an EPS of -$0.47 for FY2026. Its trailing twelve months profit margin was -11.5% and operating margin was -1.2%.
What is Precision Optics' financial position regarding debt and cash?
As of June 30, 2026, Precision Optics held $9.8M in cash and short-term investments against $4.1M in total debt, resulting in net cash of $5.8M and a current ratio of 2.28.
Does Precision Optics pay a dividend?
Precision Optics does not pay a dividend, and no dividend data is reported.
What are analysts forecasting for Precision Optics' future earnings?
Analysts estimate an EPS of -$0.30 on revenue of $31.5M for the fiscal year ending June 30, 2027, followed by projected EPS of $0.03 on revenue of $35.7M for the following fiscal year.