Breaking Down Biomerica, Inc. (BMRA) Financial Health: Key Insights for Investors

You're looking at Biomerica, Inc. (BMRA) and seeing a classic small-cap dilemma: a slight dip in top-line sales but a real commitment to operational discipline, and honestly, that's where the story is right now. For the fiscal year ending May 31, 2025, the company reported net sales of only $5.3 million, a modest decline from the prior year, largely due to global tariff-related uncertainties that delayed international orders. But here's the quick math on their focus: management achieved a $1.3 million reduction in operating expenses, which helped them improve their operating loss by a solid 19% year-over-year to $5.1 million, and cut the cash used in operating activities to $3.8 million. The real opportunity you need to map is the commercialization of their inFoods® IBS test, especially with the American Medical Association's new Proprietary Laboratory Analyses (PLA) code advancing the path for insurance reimbursement. That reimbursement is the pivot point, so let's dig into whether their cost-cutting can keep the lights on long enough for the diagnostic product to scale and turn that $5.0 million net loss into a profit.

Revenue Analysis

You need to know if Biomerica, Inc. (BMRA) is growing its top line, and the short answer for fiscal year 2025 is no, not quite. The company reported net sales of $5.3 million for the fiscal year ending May 31, 2025, which represents a slight year-over-year decline of -1.92% compared to the $5.4 million reported in the prior year. This modest dip, while small, signals a revenue stream under pressure from global factors and a shifting product mix.

Here's the quick math: A drop of just over a hundred thousand dollars in annual sales is not catastrophic, but it highlights the challenge of commercializing new diagnostic products against a backdrop of global economic uncertainty. Your focus should be on where the revenue is coming from and why the total number is flat-to-down.

Breakdown of Primary Revenue Sources

Biomerica, Inc.'s revenue comes from a portfolio of advanced medical diagnostic and therapeutic products, sold both directly to clinical labs and over-the-counter (OTC). The story of FY 2025 revenue is really a tale of two different forces-a promising new product offsetting declines in older lines.

The primary revenue streams driving the business include:

• inFoods® IBS: Sales from this key product, designed to identify food triggers for Irritable Bowel Syndrome, increased and partially offset other declines.
• International Sales: A significant portion of revenue comes from outside the U.S., including the expansion of products like the EZ Detect™ line in the Middle East and North Africa (MENA) region.
• Core Diagnostics: Sales of diagnostic tests, such as the H. pylori antigen test in the U.S. and Europe, remain a consistent segment.
• Contract Manufacturing: Agreements with other companies to manufacture products also contribute to the net sales figure.

Year-over-Year Revenue Trends

The slight decline in overall revenue for FY 2025 is a critical data point, especially when looking at the recent past. The company has seen significant volatility, so a near-flat year suggests a period of transition as they shift their sales focus toward higher-margin products like inFoods® IBS. Honestly, this kind of choppiness is defintely a risk factor for smaller-cap diagnostic companies.

Here is the recent annual revenue trend:

Analysis of Significant Revenue Changes

The -1.92% revenue decrease for Biomerica, Inc. in FY 2025 was directly tied to two main headwinds. First, global tariff-related uncertainties caused certain international customers to delay orders, impacting the timing of revenue recognition. Second, the company saw a product mix shift that resulted in fewer over-the-counter (OTC) retail sales during the fourth quarter.

What this estimate hides is the underlying shift toward the inFoods® IBS product. Increased sales from this product were the primary offset to the declines in other areas. The company is clearly banking on inFoods® IBS, which is a higher-margin product, to drive future growth. The fact that the overall gross margin still decreased to 9% in FY 2025 from 11% in FY 2024, despite this shift, suggests the manufacturing costs or product mix challenges were more severe than the growth in the new product could immediately overcome. For a deeper dive into the company's valuation, you can read the full post: Breaking Down Biomerica, Inc. (BMRA) Financial Health: Key Insights for Investors.

Next Step: Check the Q1 Fiscal 2026 report for a clearer picture of the inFoods® IBS ramp-up and the impact of the cost-saving plan.

Profitability Metrics

You're looking at Biomerica, Inc. (BMRA) because you're interested in their potential, but honestly, we have to start with the cold, hard profitability numbers. For a company focused on growth in a niche market like gastrointestinal diagnostics, the key is showing a clear path to positive margins. The fiscal year 2025 (FY2025, ended May 31, 2025) results show they are defintely focused on cost control, but they still have a significant mountain to climb to reach profitability.

Biomerica's core profitability ratios for FY2025 tell a story of a company deep in the investment phase, where expense management is critical to stemming losses. Their net sales came in at $5.3 million. Here's the quick math on their margins:

• Gross Profit Margin: Just 9.38%
• Operating Margin: A deep negative at -96.72%
• Net Profit Margin: Also sharply negative at -93.64%

That 9.38% gross margin, which is the profit left after paying for the cost of goods sold, is the first number that should grab your attention. It means for every dollar of sales, only about nine cents is left to cover all the operating expenses, like R&D and sales. The resulting Operating Loss for the year was $5.1 million, which then led to a Net Loss of approximately $5.0 million.

Operational Efficiency and Margin Trends

To be fair, the trend in their operating loss is a positive sign of disciplined management, even if the absolute number is still large. Biomerica improved its Operating Loss by 19% year-over-year in FY2025, moving from a loss of $6.4 million in the prior year to $5.1 million. This improvement wasn't from a surge in sales-revenue actually saw a slight dip from $5.4 million. It was purely from operational efficiency and cost management.

Here's where the cost control shines:

• Total operating expenses declined by over $1.3 million.
• Selling, General, and Administrative (SG&A) expenses were cut from $5.5 million to $4.6 million.
• Research and Development (R&D) expenses were reduced from $1.5 million to $1.0 million.

The company is clearly laser-focused on extending its cash runway as it pushes its flagship inFoods® IBS test toward broader commercialization and insurance reimbursement. Still, the Gross Margin actually decreased from 11% in FY2024 to 9% in FY2025, which management attributed to higher manufacturing costs and a shift in product mix. This is a crucial point: cutting R&D is a short-term win, but a falling gross margin is a long-term structural challenge they must address with higher-margin product sales.

Industry Comparison: A Stark Reality

When you compare Biomerica, Inc.'s profitability to the broader medical device and diagnostics industry, the contrast is stark. This isn't a knock on the company's potential, but a necessary reality check on its current financial standing. The industry average for profitability ratios is significantly higher, reflecting the maturity and scale of its peers. This difference highlights the risk inherent in smaller, development-stage companies like Biomerica.

The trailing twelve months (TTM) data, which is very close to the FY2025 results, shows just how far they are from the mean:

The gap is huge. This means Biomerica needs to either drastically increase its revenue from its higher-margin products, like inFoods® IBS, or find a way to cut its cost of goods sold (COGS) to move that Gross Margin closer to 50% before the Operating Margin has any chance of hitting positive territory. The recent Q1 Fiscal 2026 results (ended August 31, 2025) showed an improved gross margin driven by a more favorable, higher-margin product mix, so that's the path they need to keep walking. You can read more about the company's full financial picture in Breaking Down Biomerica, Inc. (BMRA) Financial Health: Key Insights for Investors.

Next Step: Track the Gross Margin trend in the next two quarterly reports to confirm the shift to higher-margin products is sustainable.

Debt vs. Equity Structure

The financing picture for Biomerica, Inc. (BMRA) is clear: it's a company that overwhelmingly favors equity over debt, operating with a minimal debt load. This is a common profile for small-cap biotech and diagnostics firms focused on R&D and market penetration, but it also highlights their reliance on capital markets for funding growth and covering operational burn.

Honestly, the company's financial leverage is almost non-existent. For the fiscal year ending May 31, 2025, Biomerica, Inc.'s total debt stood at just $0.45 million. This figure is an extremely low anchor for a publicly traded company. It suggests that both short-term debt (current) and long-term debt (non-current) are negligible, which is a sign of a very conservative balance sheet.

Here's the quick math on their capital structure:

• Total Debt (FY2025): $0.45 million
• Debt-to-Equity Ratio: 0.07

A Debt-to-Equity (D/E) ratio of 0.07 means the company finances only 7 cents of every dollar of equity with debt. To be fair, the industry average for the Diagnostics & Research sector is around 0.4, so Biomerica, Inc. is significantly less leveraged than its peers. That low leverage is a huge plus for stability, but it's a trade-off for growth, as they don't get the tax benefits of interest payments. One clean one-liner: Low debt means low risk, but also less financial flexibility for big moves.

The company's strategy for funding its operations and growth-especially the commercialization of its inFoods IBS test-is firmly rooted in equity financing. This is where the real action is in their capital structure. In a key move to strengthen their financial position, management raised $2.0 million through At-The-Market (ATM) offerings, which are essentially controlled equity issuances directly into the market. They also received a $1.1 million ERC tax refund post-year-end to further support operations.

This reliance on equity has also led to a significant capital structure change: the 1-for-8 reverse stock split that took effect on April 21, 2025. This move was defintely necessary to regain compliance with Nasdaq's minimum bid price requirement, which is a clear signal of the risks associated with a low-market-cap, equity-funded growth model. The focus is on new product market penetration and cost control, with the company achieving over $1.3 million in operating expense reductions in FY2025.

For investors, the takeaway is simple: Biomerica, Inc. is not a credit risk. But its financial health is tied directly to its ability to raise equity capital and manage its cash burn, which improved to $3.8 million used in operating activities in FY2025, down from $5.3 million in the prior year. The fact that the company is unrated by major agencies like Moody's or S&P is typical for a company with such minimal debt.

For a deeper dive into who is buying these shares and why they're betting on the equity side of the ledger, check out Exploring Biomerica, Inc. (BMRA) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if Biomerica, Inc. (BMRA) can cover its short-term bills, and the simple answer is yes, they can-but you need to look past the strong ratios to the underlying cash burn. The liquidity position is defintely strong on paper, but the company's operations continue to use cash, which is the key risk.

Assessing Biomerica, Inc.'s Liquidity Ratios

The company's liquidity ratios for the fiscal year ended May 31, 2025, show a very healthy ability to meet its immediate obligations. A current ratio of 2.0x is generally considered solid, and Biomerica, Inc. is well above that threshold. This signals minimal near-term default risk.

• Current Ratio: The ratio stands at a strong 3.48. This means Biomerica, Inc. has $3.48 in current assets for every dollar of current liabilities.
• Quick Ratio (Acid-Test): This ratio, which strips out inventory-often the least liquid current asset-is also high at 2.52. This is a great sign.

The difference between the Current Ratio (3.48) and the Quick Ratio (2.52) is 0.96, which is the portion of the Current Ratio covered by inventory. This gap is manageable, showing that while inventory is a factor, the company's cash and receivables alone are more than enough to cover short-term debt. A Quick Ratio over 1.0x is what you want to see.

Working Capital Trends and Cash Flow

Biomerica, Inc.'s working capital-the capital available for day-to-day operations-is substantial, sitting at approximately $3.48 million (Current Assets of $4.88 million minus estimated Current Liabilities of about $1.40 million) at the end of fiscal 2025. This is a significant buffer, but the cash flow statement tells a more complete story about where that capital is going.

Here's the quick math on their cash movements for the fiscal year 2025:

The core issue is that the company is still using cash from operations. Cash flow from operating activities was a negative $3.84 million in fiscal 2025. To be fair, this is an improvement from the prior year's cash burn, but it still means the business isn't self-sustaining yet. The minimal negative cash flow from investing activities (-$0.04 million) shows they aren't spending heavily on property or equipment, which is good for cash preservation.

Liquidity Strengths and Concerns

The strength is clearly the balance sheet's ability to absorb losses. The high current and quick ratios, plus the positive working capital, provide a solid runway. However, the consistent negative cash flow from operations is the primary concern. The company has relied on financing activities, raising $2.11 million in cash in fiscal 2025, primarily through the issuance of capital stock, to offset the operating cash burn. This dilutes existing shareholders, so you're paying for the runway with ownership stake.

The liquidity is strong, but the sustainability is weak. They have the capital to operate for the near-term, but they need to flip that operating cash flow to positive to stop relying on the capital markets. For a deeper look at the long-term strategy, you can read the full post: Breaking Down Biomerica, Inc. (BMRA) Financial Health: Key Insights for Investors.

Next Step: Check the latest quarterly report (Q1 FY2026) for a continued trend in operating cash flow improvement.

Valuation Analysis

Is Biomerica, Inc. (BMRA) overvalued or undervalued? The quick answer is that traditional valuation metrics are distorted by its unprofitability, but its Price-to-Book (P/B) and Price-to-Sales (P/S) ratios suggest a market capitalization that's not wildly disconnected from its tangible assets and revenue base, especially for a growth-focused medical device company. It's a classic case of a stock being a bet on future product success, not current earnings.

The company is focused on commercializing its inFoods® IBS test, which is a key driver of its valuation. You can dive deeper into the ownership structure and institutional interest here: Exploring Biomerica, Inc. (BMRA) Investor Profile: Who's Buying and Why?

Here's the quick math on key valuation multiples based on the fiscal year 2025 data:

• Price-to-Earnings (P/E): The P/E ratio is technically negative, at approximately -1.82 as of October 31, 2025, because Biomerica, Inc. reported a net loss of -$4.97 million for the 2025 fiscal year. You can't use a negative P/E to assess undervaluation, but it defintely signals that the company is not currently generating profit.
• Price-to-Book (P/B): The P/B ratio stands at 1.38. This is relatively modest for a biotech firm; it means you are paying $1.38 for every dollar of the company's book value (assets minus liabilities).
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is not calculable, or 'n/a,' because the company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is negative due to its operating loss. The Enterprise Value (EV) is approximately $4.75 million, while the net sales for FY 2025 were only $5.3 million.

The market is pricing Biomerica, Inc. more on its sales potential than its current bottom line. Its Price-to-Sales (P/S) ratio is 1.25, which is low for the medical device sector, a factor that might suggest undervaluation if you believe sales growth is imminent. The EV/Sales ratio is also low at 0.97.

The stock price trend over the last 12 months has been highly volatile and generally bearish. The stock price closed at $2.41 on November 14, 2025, representing a -18.38% decrease over the last 52 weeks. The 52-week range shows the extreme swings, from a low of $2.08 to a high of $10.16. The low price is a direct result of the company's continued losses and a recent reverse stock split in April 2025.

Biomerica, Inc. is not a dividend stock. The company has a dividend yield of 0.00% and does not pay dividends, which is typical for a company in a growth and commercialization phase that needs to reinvest all available capital back into the business.

Analyst consensus presents a split view. Technical signals as of mid-November 2025 lean toward a 'Strong Sell' candidate due to a wide and falling trend. However, some analyst price targets are dramatically higher, with an average one-year target around $13.26, suggesting a belief that the inFoods® IBS product will drive significant revenue growth and a massive re-rating of the stock. What this estimate hides is the execution risk inherent in commercializing a new diagnostic test. The market is clearly waiting for consistent, profitable revenue growth to bridge the gap between the current price and the high-end analyst targets.

Risk Factors

You're looking at Biomerica, Inc. (BMRA) and seeing the promise of their inFoods® IBS test, but the financial reality is that this is a high-risk micro-cap stock with significant near-term headwinds. The core issue is a persistent cash burn and a heavy reliance on future product success to offset a long history of losses. Honesty, the company's probability of bankruptcy was flagged at over 81%, which is a stark figure you can't ignore.

Operational and Financial Fragility

The most immediate risks are internal, centered on profitability and liquidity. For the fiscal year ended May 31, 2025, Biomerica reported net sales of only $5.3 million, a slight dip from the prior year. The full-year gross profit was just $498,000, which translates to a gross margin of about 9.4%. This slim margin makes it incredibly difficult to cover operating expenses, which were still high despite aggressive cuts.

Here's the quick math: the operating loss for Fiscal Year 2025 was $5.1 million. While this was a 19% improvement year-over-year, it still means the company is losing money at a rate that demands constant capital infusion. The negative retained earnings stood at approximately $51.6 million as of the third quarter of Fiscal Year 2025, underpinning a fragile earnings trajectory. They are defintely in a race against the clock to scale inFoods.

• Sustained Losses: Operating loss of $5.1 million in FY2025.
• Capital Dependence: Ongoing need for external financing to fund operations and growth.
• Revenue Volatility: Revenue is tiny and subject to pronounced quarter-to-quarter swings.

External and Strategic Hurdles

Beyond the balance sheet, Biomerica faces substantial external risks common in the diagnostics space, plus a few unique to their global footprint. Regulatory approval is one thing, but getting paid is another. The primary strategic risk revolves around securing insurance reimbursement for the inFoods IBS test, which is crucial for broad commercial adoption. While the American Medical Association CPT Editorial Panel issued a Proprietary Laboratory Analyses (PLA) code for the test, this is only an advancement, not a guarantee of coverage or adequate payment rates from private and public payers.

Also, global market conditions are a clear headwind. The company explicitly cited global tariff-related uncertainties that caused certain international customers to delay orders, contributing to the modest revenue decline in Fiscal 2025. This shows a direct impact of macro-economic events on their top line, which is particularly painful for a company with a small revenue base.

Mitigation and Actionable Steps

To be fair, management is taking clear steps to address the cash burn. They implemented a significant cost-reduction plan in Fiscal 2025, which reduced total operating expenses by over $1.3 million. Specifically, they cut selling, general and administrative expenses from $5.5 million to $4.6 million and research and development expenses from $1.5 million to $1.0 million. This disciplined approach improved cash used in operating activities from $5.3 million to $3.8 million.

They also raised capital, securing $2.0 million through at-the-market (ATM) offerings in FY2025 to bolster the balance sheet. This is a necessary, but temporary, fix. The real long-term mitigation is the successful commercialization of inFoods IBS, and the PLA code is a positive step toward that goal. For a deeper dive into the company's valuation models and strategic positioning, read the full analysis at Breaking Down Biomerica, Inc. (BMRA) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking for the clear path to growth for Biomerica, Inc. (BMRA) beyond the current financials, and the story is centered on proprietary diagnostics and strategic market access. The company's future hinges on successfully monetizing its inFoods® Irritable Bowel Syndrome (IBS) test, specifically by securing widespread insurance coverage and expanding its Contract Development and Manufacturing Organization (CDMO) services.

Biomerica's fiscal year 2025 (FY2025) revenue came in at $5.3 million, a slight dip from the prior year's $5.4 million, but the underlying strategic moves point to potential inflection points. The focus has shifted from managing a small, diverse product portfolio to aggressively commercializing its high-value, patented inFoods® platform, which is defintely the core asset here.

Key Growth Drivers: Innovation and Market Access

The primary driver is the transition of inFoods® IBS from a niche product to a widely accessible diagnostic tool. This test helps patients identify food triggers for their IBS symptoms. The company has made significant strides in removing friction for patient and physician adoption:

• Reimbursement Pathway: The American Medical Association (AMA) CPT Editorial Panel issued a Proprietary Laboratory Analysis (PLA) code for the inFoods® IBS test, a critical step for securing commercial insurance reimbursement and Medicare coverage.
• Product Innovation: The launch of a new patient self-collection system enables at-home blood sample collection via a simple finger-stick device, dramatically expanding the test's reach through telehealth and online medical providers.
• New Intellectual Property: Biomerica secured three new international patents for the inFoods® technology, opening up multi-billion-dollar market opportunities in other gastrointestinal diseases like Gastroesophageal Reflux Disease (GERD), Crohn's Disease, and Ulcerative Colitis.

Beyond the inFoods® platform, the expansion of its CDMO services is a quiet, reliable revenue stream. With over 40 years of expertise in assay development and regulatory compliance, Biomerica is leveraging its ISO 13485 certification and FDA-registered cGMP facility to service other diagnostic innovators.

Competitive Edge and Near-Term Actions

The competitive advantage for Biomerica, Inc. is its proprietary diagnostic platform in a market segment-food-induced IBS-that is still underserved by precision medicine. The inFoods® technology is a unique asset, and the company is actively pursuing strategic partnerships to broaden its commercialization in the U.S. and internationally.

Near-term, the company is also expanding its presence in the Middle East and North Africa (MENA) region, evidenced by the UAE Ministry of Health and Prevention approval for the Fortel® Prostate (PSA) rapid screening test. This geographic expansion diversifies its revenue base away from the core IBS focus. You need to watch the pace of inFoods® IBS adoption, which is the real needle-mover.

Here's the quick math on recent results, showing the immediate challenge and the operational improvements:

The company is demonstrating strong operational discipline, reducing its operating loss by 19% to $5.1 million and cutting cash used in operations by $1.5 million in FY2025. This cost control, coupled with the PLA code for inFoods® IBS, positions the company for a potential revenue surge once reimbursement is secured, which is the key action to monitor. For a deeper dive into the full financial picture, you can check out Breaking Down Biomerica, Inc. (BMRA) Financial Health: Key Insights for Investors.