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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3350
Positioning
Market Dominance
Manufacturing
Medical Equipment
$34M
Joseph N. Forkey
Precision Optics Corporation, Inc. designs, develops, manufactures, and sells specialized optical and illumination systems. The company offers medical instrumentation products, including endoscopes and endocouplers. It also provides components and assemblies, which are designed for industrial and military use. Company was incorporated in 1982 and is based in Gardner, Massachusetts.
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| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$POCI PRECISION OPTICS CORPORATION, INC. | 42 | 40 | 38 | 40 | - | - | -69.5% | -28.3% | 12.6% | -29.1% | -30.0% | 75.5% | 0.0% | 17.0x | $34M | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
PRECISION OPTICS CORPORATION, INC. (POCI) receives a "Reduce" rating with a composite score of 41.5/100. It ranks #3350 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Joseph N. Forkey
Chief Executive Officer
Labor Force
80
40
23
72
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for POCI
Lagging peers — losers tend to keep underperforming
Fair valuation relative to peers
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for POCI.
View All RatingsMaterial decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
ROE proxy -69.5% (sector -2.5%)
GM 13% vs sector 43%, OM -29% vs sector 1%
Capital turnover N/A, R&D intensity 4.0%
Rev growth 76%, 11yr history
Interest coverage -45.3x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
PRECISION OPTICS CORPORATION, INC. receives a Reduce rating from our analysis, with a composite score of 41.5/100 and 2 out of 5 stars, ranking #3350 out of 7,333 stocks. POCI's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
POCI's quality score of 40/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of -69.5% (sector avg: -2.5%), gross margins of 12.6% (sector avg: 42.5%), net margins of -30.0% (sector avg: -0.2%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 38/100, POCI appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/B ratio of 3.67x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
PRECISION OPTICS CORPORATION, INC.'s investment score of 23/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 75.5% vs. a sector average of 5.9% and a return on assets of -28.3% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
POCI is currently showing below-average momentum at 40/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at 75.5% year-over-year, while a beta of 0.14 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
POCI shows good financial stability with a score of 72/100. Key stability metrics include a beta of 0.14 and a debt-to-equity ratio of 17.00x (sector avg: 0.2x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
The short interest score of 52/100 for POCI suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 17.00x), micro-cap liquidity risk. With a $34M market cap (micro-cap), PRECISION OPTICS CORPORATION, INC. may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
PRECISION OPTICS CORPORATION, INC. is a micro-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #3350 of 7,333 overall (54th percentile). Key comparisons include ROE of -69.5% trailing the -2.5% sector median and operating margins of -29.1% below the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While POCI currently exhibits a REDUCE profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Investment (23) would have the largest impact on the composite score.
ROE 2702% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 70% BELOW SECTOR MEDIAN
Op. Margin 2354% BELOW SECTOR MEDIAN
AUDIT DATA AS OF DEC 31, 2025 (Q3 FY2025)
We rate PRECISION OPTICS CORPORATION, INC. (POCI) as a Reduce with a composite score of 41.5/100 at a current price of $4.37. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in stability (72th percentile) and quality (40th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (23th percentile) and value (38th percentile) tempers our overall conviction. We assign a No Moat rating (23/100), Medium uncertainty, and Poor capital allocation.
Key items to watch: momentum to confirm whether the current price trend has legs; sustainability of the current growth rate; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
PRECISION OPTICS CORPORATION, INC. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 41.5/100 places it at rank #3350 in our full 7,333-stock universe. At $34M in market capitalization, PRECISION OPTICS CORPORATION, INC. is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue is growing at 76%, though momentum at the 40th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.
The margin cascade tells an important story: gross margins of 13% (-29.9pp vs sector) narrow to operating margins of -29% (-30.4pp vs sector) and net margins of -30.0%, yielding a gross-to-net conversion rate of -238%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $4.37, PRECISION OPTICS CORPORATION, INC. is trading at a premium to fundamental value. Our value factor score of 38/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.
The stock currently trades at P/B of 3.7x, P/S of 1.5x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.
Revenue growth of 76% confirms the business is expanding its addressable market — growth at this level typically supports multiple expansion and attracts institutional capital.
A conservative balance sheet (17% D/E) provides financial flexibility for acquisitions, buybacks, or weathering economic downturns without dilution.
The Reduce rating (composite 41.5/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Thin net margins of -30.0% provide limited cushion against cost pressures, competitive pricing, or macroeconomic headwinds — even small changes in costs could swing the company to a loss.
We assign a Medium uncertainty rating to PRECISION OPTICS CORPORATION, INC.. The stock presents a balanced risk profile: current negative profitability (net margin -30.0%) and low beta of 0.14 — while defensive, this may indicate limited upside participation in bull markets. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.
Specific risk factors that inform our assessment include: current negative profitability (net margin -30.0%); low beta of 0.14 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 72th percentile and quality factor at the 40th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: conservative leverage (17% D/E) limits balance sheet risk; above-average stability (72th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate PRECISION OPTICS CORPORATION, INC.'s capital allocation as Poor. Key concerns include low returns on equity (-69.5%), negative profitability, weak asset returns (ROA -28.3%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — PRECISION OPTICS CORPORATION, INC. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, PRECISION OPTICS CORPORATION, INC. receives a Reduce rating with a composite score of 41.5/100 (rank #3350 of 7,333). Our quantitative framework assigns a No Moat (23/100, trend: stable), Medium uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 43/100.
Our analysis does not support a constructive view on PRECISION OPTICS CORPORATION, INC. at this time. The combination of limited competitive advantages, medium uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign PRECISION OPTICS CORPORATION, INC. a meaningful economic moat, scoring 23/100 on our composite assessment. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, growth durability, reached only 10.5/20.
The strongest moat sources are growth durability (10.5/20) and financial resilience (7/20). Rev growth 76%, 11yr history. Interest coverage -45.3x. These pillars form the core of PRECISION OPTICS CORPORATION, INC.'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include economic value creation (0/20) and reinvestment efficiency (1.4/20). ROE proxy -69.5% (sector -2.5%). Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect PRECISION OPTICS CORPORATION, INC.'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include robust top-line growth of 76% expanding the revenue base. The margin cascade from 13% gross to -29% operating to -30.0% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality is adequate though not exceptional, with the quality factor at the 40th percentile.
The margin profile shows gross margins of 13%, operating margins of -29%, net margins of -30.0%. Return metrics include ROE of -69.5% and ROA of -28.3%. Relative to the Manufacturing sector, gross margins are 29.9 percentage points below the sector median of 43%, and ROE of -69.5% compares to a sector median of -2.5%.
The balance sheet reflects a conservatively managed balance sheet with D/E of 17%, revenue growth of 76%. The sector median D/E is 0%, putting PRECISION OPTICS CORPORATION, INC. at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Operator: Good day, and welcome to the Precision Optics Reports Second Quarter Fiscal Year 2026 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.
Conference Call Scheduled for today, February 17, 2026, at 5:00pm ETGARDNER, Mass., Feb. 17, 2026 (GLOBE NEWSWIRE) -- Precision Optics Corporation, Inc. (NASDAQ: POCI), a leading designer and manufacturer of advanced optical instruments for the medical and defense/aerospace industries, announced operating results on an unaudited basis for its second quarter fiscal year 2026 for the period ended December 31, 2025. Q2 2026 Financial Highlights (3 Months Ended December 31, 2025): Revenue was $7.4 m
Precision Optics Corporation, Inc. (POCI) announced the resignation of its Senior Vice President of Sales and Marketing, Jeffrey L. DiRubio, effective June 30, 2024. DiRubio will continue to provide his expertise to the company through a one-year consulting agreement, with a compensation of $110,000.
Precision Optics Corp Inc (POCI) reports a 92% increase in production revenue, but faces profitability hurdles with lower gross margins and a net loss.
MAYFIELD HEIGHTS, Ohio, February 12, 2026--Materion Corporation (NYSE: MTRN) today reported fourth quarter and full-year 2025 financial results, provided strong 2026 earnings guidance and announced a $65 million customer investment to support US defense initiatives.
Above 50MA
37.18%
Net New Highs
+51081