Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors

If you're looking at Universe Pharmaceuticals INC (UPC), you need to look past the name and straight at the numbers-and honestly, they tell a tough story right now. The company's financial health, based on the latest 2025 fiscal year data, shows significant contraction, with trailing twelve-month (TTM) revenue ending March 31, 2025, at just $19.29 million, a steep -27.81% year-over-year decline. This isn't just a slowdown; the second quarter of 2025 alone saw revenue of $9.15 million and a net loss of $-3.28 million, which translates to a TTM net profit margin of -37.90%. Here's the quick math: a company with a tiny market capitalization of about $2.41 million as of late 2025 is struggling to turn sales into profit, even with a manageable Debt/Equity ratio of 14.01%. We need to defintely dig into what's driving that revenue drop and the negative -23.49% Return on Equity (ROE).

Revenue Analysis

You're looking for a clear picture of Universe Pharmaceuticals INC (UPC)'s financial engine, and the 2025 data shows a significant deceleration you need to factor into your valuation. The direct takeaway is that UPC's revenue, while still anchored in its core Traditional Chinese Medicine Derivatives (TCMD) business, is shrinking fast, with trailing twelve-month revenue ending March 31, 2025, at just over $19.29 million. That's a serious headwind.

The company's primary revenue streams are straightforward, but the growth trend is the real story. UPC is essentially a China-focused operation; 100.00% of its reported 2024 fiscal year revenue came from the People's Republic of China (PRC). Its business segments break down into two main categories, which is a simple model, but one that is currently under immense pressure.

• Manufactured TCMD sales: The core business, making up 60.92% of revenue.
• Third-party product sales: Distribution of other companies' goods, accounting for 39.08%.

Here's the quick math: For the fiscal year ending September 30, 2024, the company generated $23.02 million in total annual revenue. Of that, the sales of their own TCMD products brought in $14.03 million, with the remaining $9.00 million coming from distributing third-party pharmaceuticals and supplements. You can see the reliance on their own manufactured goods, but the third-party distribution is a critical, high-volume segment that can be volatile.

The year-over-year trend is defintely concerning. The trailing twelve-month (TTM) revenue ending March 31, 2025, was $19.29 million, which marks a year-over-year revenue decline of -27.81%. This isn't a one-off issue; the annual revenue for the full 2024 fiscal year was $23.02 million, a -28.74% drop from the previous year. The half-year revenue ending March 31, 2025, was only $9.15 million, a precipitous -50.44% decrease compared to the prior-year period.

What this estimate hides is the multi-year erosion of the top line. UPC's revenue has been in a steep decline since 2021, and the 2025 half-year numbers show that trend is accelerating, not stabilizing. This significant change in revenue is a direct risk to future cash flow, and it's why a deep dive into the company's cost structure and market position is essential. You need to understand their Mission Statement, Vision, & Core Values of Universe Pharmaceuticals INC (UPC) to see if their strategy can reverse this trend.

The revenue composition itself hasn't radically changed-it's still TCMD-heavy and China-exclusive-but the volume has fallen off a cliff. This indicates either a significant loss of market share, a major disruption in their distribution channels, or a fundamental shift in demand for their traditional product mix. The market is contracting for them, and quickly.

Next step: Dig into the gross margins for the TCMD versus third-party sales to see which segment is dragging profitability down the most.

Profitability Metrics

You're looking at Universe Pharmaceuticals INC (UPC) and trying to figure out if the recent stock volatility is a blip or a symptom of a deeper financial issue. The direct takeaway is this: UPC's profitability metrics for the trailing twelve months (TTM) ending March 2025 show the company is operating at a significant loss, driven by a sharp drop in revenue and high operating expenses.

Honestly, the numbers are a serious headwind. For the TTM period ending March 31, 2025, Universe Pharmaceuticals INC reported total revenue of $19.29 million. The cost of revenue was $13.43 million, leaving a gross profit of just $5.87 million. Here's the quick math on the margins:

• Gross Profit Margin: 30.43%
• Operating Profit Margin: -44.63%
• Net Profit Margin: -49.9%

Profitability Trends and Industry Comparison

The trend in profitability is the most concerning part of the analysis. The company has seen a precipitous decline since its profitable year in 2021. Back then, Universe Pharmaceuticals INC posted a net income of $11.32 million. By the end of fiscal year 2024, that flipped to a net loss of -$8.73 million. The TTM data through March 2025 shows the net loss widening further, indicating the downward momentum is defintely still in play.

Comparing these figures to the industry average for Drug Manufacturers-Specialty & Generic puts UPC's operational strain into sharp relief. The industry average Gross Profit Margin is around 64.4%, nearly double UPC's 30.43%. While the industry average Net Profit Margin is a negative -32%, reflecting high research and development (R&D) costs typical of the sector, UPC's -49.9% net loss is substantially worse. This suggests the company is not just dealing with high industry costs, but also company-specific problems.

Analysis of Operational Efficiency

The massive spread between the Gross Profit Margin (30.43%) and the Operating Profit Margin (-44.63%) is a clear signal of poor operational efficiency and cost management beyond the production line. Gross margin trends have been poor, but the real killer is the operating expense load.

Operating income (Earnings Before Interest and Taxes or EBIT) for the TTM period was a loss of -$8.61 million. This loss stems from operating expenses, which totaled $14.47 million against that $5.87 million gross profit. The high Selling, General & Administrative (SG&A) and R&D costs are simply not being covered by the shrinking sales base. You need to see a clear plan to right-size this cost structure, especially given the continuous revenue decline, which was -27.81% year-over-year for the TTM period. The business is shrinking faster than management is cutting costs.

If you're interested in the long-term strategic direction, you should review the company's Mission Statement, Vision, & Core Values of Universe Pharmaceuticals INC (UPC).

Next step: Dig into the latest 10-Q filing to see management's specific plan for reducing SG&A and R&D spending in the back half of 2025.

Debt vs. Equity Structure

You want to know how Universe Pharmaceuticals INC (UPC) pays for its growth, and the quick answer is: mostly with shareholder money, not borrowed funds. This is a critical point for a pharmaceutical company, especially one facing market volatility.

As of the latest available data, Universe Pharmaceuticals INC maintains a very conservative balance sheet. Its total debt sits at approximately US$7.731 million, which is a small figure relative to its total equity.

Here's the quick math on their financing structure, which shows a clear preference for equity funding over debt:

• Total Debt: Approximately US$7.731 million.
• Total Equity: Approximately US$55.18 million.
• Current Ratio: A healthy 2.78, meaning short-term assets far exceed short-term liabilities.

The most telling metric here is the Debt-to-Equity (D/E) ratio, which measures a company's financial leverage-how much debt it uses to finance assets relative to the value of shareholders' equity. For Universe Pharmaceuticals INC, this ratio is a low 14.0% (or 0.14).

To be fair, this is defintely a low-leverage profile, and it looks great compared to the broader Healthcare sector average for developing economies, which sits around 33.2%. A low D/E ratio means the company has less financial risk from interest payments and principal repayment, but it also suggests they may not be fully utilizing debt as a tool to accelerate expansion.

Exploring Universe Pharmaceuticals INC (UPC) Investor Profile: Who's Buying and Why?

When we look at recent financing, Universe Pharmaceuticals INC has actively chosen to bolster its equity position. In late 2024, the company closed a registered direct offering of ordinary shares and warrants, raising approximately $15 million in gross proceeds. This move is a clear signal: they are raising capital through equity, diluting existing shareholders to avoid taking on more debt.

The company's balance between debt and equity is heavily skewed toward equity, which is a conservative approach. They have minimal debt obligations, but the trade-off is the dilution from recent share offerings. This strategy gives them flexibility, but it also means shareholders bear the brunt of any losses, as seen in the negative Return on Equity (ROE) of -23.49%.

For you, the investor, this means the risk of a debt-driven default is low, but the risk of value erosion through dilution and operational losses is what you need to watch closely.

Liquidity and Solvency

You want to know if Universe Pharmaceuticals INC (UPC) can cover its near-term bills, and the simple answer is yes, they have a solid cushion. As of March 31, 2025, the company's liquidity position is strong, primarily due to a significant cash increase, but you still need to watch their core operations.

The core liquidity metrics look great. The Current Ratio, which measures current assets against current liabilities, stood at a healthy 2.78 for the quarter ending March 31, 2025. This means UPC has $2.78 in current assets for every dollar of short-term debt. Even better, the Quick Ratio (or acid-test ratio), which strips out inventory-a less liquid asset-was also very high at 2.62. Honestly, a quick ratio over 1.0 is the goal, so a 2.62 is defintely a sign of immediate financial strength. That's a lot of easily accessible capital.

Analysis of Working Capital Trends

The working capital position-the capital available to fund day-to-day operations-has seen a major boost. Here's the quick math: Current Assets were $65.03 million against Short-Term Liabilities of approximately $23.4 million as of March 31, 2025. This leaves a positive working capital of about $41.63 million. This is a significant increase from the prior fiscal year-end, driven largely by a jump in Cash and Equivalents, which climbed to $47.27 million in the latest period from $29.5 million just six months earlier.

• Current Ratio: 2.78 (Mar 2025)
• Quick Ratio: 2.62 (Mar 2025)
• Working Capital: $41.63 million (Mar 2025)

Cash Flow Statements Overview

While the balance sheet shows a lot of cash, the cash flow statement tells the real story about where that money is coming from. The net change in cash for the latest quarter was a positive $17.78 million, which is a great number. But when you look at the composition of the cash flow, you see where the risk lies.

In the most recent full fiscal year (2024), the company posted negative Cash Flow from Operating Activities (CFOA) of -$9.51 million. This is critical because it means the core business-selling pharmaceuticals-is not generating enough cash to cover its own expenses. The cash they are accumulating isn't coming from their main product lines. So, where is the cash coming from?

The cash flow statement trends for the 2024 fiscal year show a reliance on other activities to maintain cash levels:

What this estimate hides is that the major cash increase in 2025 is likely from a capital raise, not a turnaround in operations, which is a key distinction for investors. The $17.78 million net cash increase in the latest quarter is a strong buffer, but the underlying negative CFOA in the prior period suggests this cash is being used to sustain a loss-making operation.

Potential Liquidity Concerns and Strengths

The strength is obvious: the high Current and Quick Ratios mean there is no immediate liquidity crisis. They have plenty of cash to meet short-term obligations, plus they have a low debt-to-equity ratio, which is a solvency strength. However, the biggest near-term risk is the sustainability of their business model. UPC cannot continue to burn cash from operations and rely on external funding or one-time cash injections forever. Your action should be to monitor the next earnings report for a significant improvement in Cash Flow from Operating Activities. If you want a more comprehensive look at the company's position, you can read the full post here: Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.

Finance: Track the quarterly change in CFOA versus the net income to see if the operating cash burn is accelerating or slowing down.

Valuation Analysis

You are looking for a clear picture of Universe Pharmaceuticals INC (UPC)'s intrinsic value, and the numbers tell a story of extreme risk and potential undervaluation, but only if you look past the surface-level metrics. The stock is currently trading at approximately $3.65 as of mid-November 2025, which is a staggering decline of -95.41% over the last 52 weeks, a period that saw the price swing from a low of $2.51 to a high of $197.20.

The core valuation ratios for Universe Pharmaceuticals INC are distorted by its unprofitability and negative Enterprise Value (EV). The Price-to-Earnings (P/E) ratio is reported as 0.00 as of November 2025 because the company recorded a significant loss per share of 255.68, making the standard P/E calculation meaningless for comparison. Similarly, the Enterprise Value-to-EBITDA (EV/EBITDA) ratio is not available (n/a) due to insufficient data, though the company's Enterprise Value sits at a negative -$37.63 million.

Here's the quick math on what matters most for a company like this: the Price-to-Sales (P/S) and Price-to-Book (P/B) ratios. These are the metrics that show how cheap the stock is relative to its sales and assets, which is often the best measure for a turnaround play.

• Price-to-Sales (P/S) Ratio: 0.03 or 0.1x. This is extremely low, suggesting the stock is priced at just cents on the dollar for every dollar of revenue.
• Price-to-Book (P/B) Ratio: 0.03. This means the stock is trading far below its book value, another strong indicator of potential deep value.

The low P/S ratio of 0.1x is significantly better value compared to the US Pharmaceuticals industry average of 4x, or even its peer average of 1.8x. To be fair, this deep discount reflects the high risk, including a 1:40 reverse stock split that took effect on March 24, 2025, a common move to avoid Nasdaq delisting due to low share price.

Dividend and Analyst Consensus

If you're looking for income, Universe Pharmaceuticals INC is not the place. The company does not pay a dividend, so the dividend yield and payout ratio are both 0.00% as of November 2025.

The analyst community is defintely cautious. The consensus rating from Wall Street analysts is a Sell or Strong Sell. The average analyst price target is an alarming $0.8403, which implies a further downside of about -76.46% from the recent price of $3.57. This is a clear signal that the market is still pricing in significant fundamental risk despite the low P/B and P/S ratios.

For a complete picture of the company's operational health, you should review the full analysis at Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors. Your next step should be to model a liquidation scenario, given the steep discount to book value, to see if the asset base truly provides a margin of safety.

Risk Factors

You need to understand this upfront: Universe Pharmaceuticals INC (UPC) is currently a high-risk turnaround play, not a stable growth investment. The core risks center on severe revenue contraction, negative cash flow, and an ongoing fight to maintain its NASDAQ listing, which creates extreme share price volatility.

The numbers from the 2025 fiscal year tell a clear story of operational and financial distress. For the last twelve months (LTM), the company posted a net loss of approximately $-9.6 million, driven by a significant revenue decline of -29.0% year-over-year (YoY). Honestly, that kind of top-line erosion-following a 60% decline over the past three years-is a flashing red light for any pharmaceutical company, especially one focused on traditional Chinese medicine derivative products in a highly competitive market.

Here's the quick math on financial stability: the Altman Z-Score, a measure of bankruptcy risk, sits at a concerning 0.82. A score under 3.0 suggests an increased risk of financial distress. Plus, the company's operating cash flow (OCF) for the LTM was negative $-4.52 million, resulting in a negative free cash flow (FCF) of $-4.79 million. You can't sustain a business long-term when you're burning that much cash.

• Regulatory Pressure: NASDAQ has issued deficiency notices related to delayed filings, a direct threat to the stock's listing status.
• Market Volatility: The stock's 52-week price change was a staggering -95.41% as of November 2025, a sign of extreme instability and investor uncertainty.
• Competitive Headwinds: Operating in the Chinese pharmaceutical sector means intense competition, which is a key external factor contributing to the revenue decline.

To be fair, management is taking steps to mitigate the immediate threats. They executed a 40-for-1 share consolidation in March 2025, a technical maneuver to artificially boost the share price and comply with the NASDAQ minimum bid price rule, reducing the immediate delisting risk. Also, a major capital reorganization was announced in July 2025 to streamline the capital structure, and they are looking at leveraging intellectual properties and growing via partnerships to offload capital stress. But still, these are reactive measures to deep-seated issues.

The Debt-to-Equity ratio is low at 0.14, which is a positive sign of manageable leverage, but the sheer scale of the revenue problem overshadows this. The current market capitalization is tiny, around $1.92 million, which amplifies volatility. This is defintely a situation where a small amount of trading volume can cause massive price swings.

For a deeper dive into the company's overall health, check out the full post: Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Universe Pharmaceuticals INC (UPC) and trying to map out its future, but let's be honest, the recent numbers tell a story of significant contraction, not expansion. The growth conversation here isn't about massive top-line expansion right now; it's about strategic survival and positioning for a turnaround. We need to focus on the pivot points.

For the trailing twelve months ending March 31, 2025, Universe Pharmaceuticals INC (UPC) posted revenue of just over $19.29 million, a sharp decline from previous periods. Still, they managed to eke out a net profit (earnings) of approximately $1.09 million over that same period. That profit, however small, shows some operational resilience, but it's not a growth story yet. The market agrees, with a consensus analyst rating of 'Sell.'

Key Growth Drivers and Strategic Moves

The company's primary, and most compelling, growth driver is its deep-seated focus on the aging population in China. This demographic trend is a massive, structural tailwind, creating a growing demand for the traditional Chinese medicine (TCM) derivative products Universe Pharmaceuticals INC (UPC) manufactures, particularly those targeting chronic conditions and longevity. That's the long-term opportunity. The near-term focus, however, has been on financial restructuring to stabilize the foundation.

Here's the quick math on their strategic actions in 2025:

• Share Consolidation: A 40-for-1 share consolidation was executed in March 2025. This move, while often viewed negatively, was necessary to boost the stock price and maintain compliance with Nasdaq's minimum bid requirements, which is a critical step for market credibility.
• Capital Reduction: Shareholders approved a significant capital reduction plan in September 2025. This is a technical move intended to provide greater financial flexibility by altering the share capital structure.
• Partnerships: Management has signaled a strategy to grow via partnerships and by leveraging intellectual properties to offload capital stress. This is a smart, capital-light approach for a company with a small market capitalization of around $1.97 million.

The execution of these strategic initiatives is defintely the most important factor to watch right now.

Competitive Advantages and Future Outlook

Universe Pharmaceuticals INC (UPC)'s core competitive advantage lies in its specialization within the Traditional Chinese Medicine (TCM) market in China. This is a niche that requires specific regulatory approvals, deep local distribution networks, and consumer trust built over time-all high barriers to entry for foreign competitors. Plus, their product portfolio, which includes medications for common chronic health conditions and cold/flu, taps into everyday healthcare needs.

What this estimate hides is the extreme volatility; the stock price has experienced massive short-term spikes and drops, showing it's highly sensitive to market sentiment and news. The lack of a consensus EPS forecast from professional analysts for the full 2025 fiscal year means you must rely heavily on the company's own guidance and your independent due diligence. The most recent analyst price target available is a Hold rating with a $3.50 price target, issued in September 2025.

To truly understand the conviction behind these moves, you should be Exploring Universe Pharmaceuticals INC (UPC) Investor Profile: Who's Buying and Why?

Next Step: Monitor for Q4 2025 earnings release (expected Feb 2026) for concrete evidence of revenue stabilization following the 2025 strategic actions. Owner: Your Portfolio Review.