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

Are you keeping a close watch on your investments in the pharmaceutical sector? With Universe Pharmaceuticals INC (UPC) facing potential delisting from Nasdaq due to delays in filing its annual report and not meeting minimum bid price requirements, is now the time to re-evaluate? The company's stock experienced significant volatility, closing at $3.56 on a recent Thursday with intraday swings exceeding 17%. Furthermore, a 30% drop in revenue for the first half of fiscal year 2024, coupled with widening net losses to $13.1 million, raises critical questions about the company's financial stability and future prospects. Dive in to gain key insights and make informed decisions.

Universe Pharmaceuticals INC (UPC) Revenue Analysis

Understanding the financial health of Universe Pharmaceuticals INC (UPC) requires a detailed look into its revenue streams. This analysis provides insights into the company's primary revenue sources, growth trends, and the contribution of different business segments to its overall revenue. Here's a detailed breakdown:

Primary Revenue Sources:

Universe Pharmaceuticals INC (UPC) generates revenue primarily from the production and distribution of pharmaceutical products in China Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.

• The company focuses on both manufacturing its own pharmaceutical products and distributing products from third parties.

Year-over-Year Revenue Growth Rate:

Analyzing the year-over-year revenue growth rate provides a clear picture of the company's financial trajectory. Recent data indicates some fluctuations in UPC's revenue.

• In the fiscal year ending September 30, 2023, Universe Pharmaceuticals had an annual revenue of $32.31 million, representing a -19.52% growth rate Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.
• The revenue for the quarter ending March 31, 2024, was $12.88 million, a -6.92% change. This brings the company's revenue in the last twelve months to $26.73 million, which is a -17.28% decrease Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.
• For the first six months of fiscal year 2024 ended March 31, 2024, the company generated $12.9 million in revenue, compared to $18.5 million in the same period last year Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.

Historical Revenue Trends:

To provide a broader perspective, here’s a look at UPC's revenue trends over a longer period:

• 3-Year Revenue Growth Rate: As of April 18, 2025, the 3-year revenue growth rate for UPC is 1.70% Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.

Contribution of Different Business Segments:

A breakdown of revenue contribution by different segments helps to identify the key drivers of UPC's revenue.

• For the six months ended March 31, 2024, sales of third-party products decreased by $3.079 million, or 33.9%, to $6.013 million, from $9.092 million for the six months ended March 31, 2023 Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.
• The company is also focusing on expanding its online sales channels to complement offline sales, expecting online sales to drive future business growth Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.

Analysis of Significant Changes in Revenue Streams:

Several factors have influenced UPC's revenue streams, as noted in their financial reports:

• A global economic slowdown led to decreased customer spending power during the six months ended March 31, 2024 Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.
• Fluctuations in foreign currency exchange rates had a 3.3% negative impact, as the average exchange rate changed from US$1 to RMB6.9761 to US$1 to RMB7.2064 during the specified period Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.
• The company is actively implementing strategies such as digital marketing and expanding sales on e-commerce platforms to improve brand recognition and expand its customer base Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.

Universe Pharmaceuticals INC (UPC) Profitability Metrics

Analyzing Universe Pharmaceuticals INC's (UPC) profitability involves examining several key metrics that provide insights into the company's financial health. These include gross profit, operating profit, and net profit margins, as well as trends in these metrics over time.

For the six months ended March 31, 2024, Universe Pharmaceuticals INC reported a gross profit of $3,369,331, a decrease from $6,128,142 for the six months ended March 31, 2023. The gross margin also decreased by 7.0% to 26.2% for the same period in 2024, from 33.2% in 2023. This decline is attributed to decreased customer demand and the impact of fluctuations in the foreign currency exchange rate.

The company's operating performance also reflects challenges. The loss from operations was $1.7 million for the six months ended March 31, 2024, compared to an income from operations of $0.1 million for the six months ended March 31, 2023. The net loss was substantial, reaching $13.1 million for the six months ended March 31, 2024, compared to a net loss of $0.7 million for the same period in 2023. These figures indicate significant operational and financial strain.

Here's a summary of UPC's profitability metrics:

• Gross Profit: Decreased to $3.37 million for the first six months of fiscal year 2024.
• Gross Margin: Declined to 26.2% for the first six months of fiscal year 2024.
• Loss from Operations: $1.7 million for the first six months of fiscal year 2024.
• Net Loss: $13.1 million for the first six months of fiscal year 2024.

Additional profitability metrics, based on available data, are as follows:

These figures reveal a concerning trend in Universe Pharmaceuticals INC's financial performance, marked by declining profitability and increasing losses. For further insights, you can read more at: Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors.

Universe Pharmaceuticals INC (UPC) Debt vs. Equity Structure

Understanding how Universe Pharmaceuticals INC (UPC) finances its operations and growth is crucial for investors. This involves analyzing the company’s debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity to fund its activities.

A review of Universe Pharmaceuticals INC (UPC)'s financial statements provides insights into its debt structure. This includes both short-term and long-term debt obligations. Short-term debt typically covers liabilities due within a year, while long-term debt includes obligations extending beyond a year. Evaluating the amounts of each helps in understanding the company's immediate and future financial commitments.

The debt-to-equity ratio is a key metric for assessing Universe Pharmaceuticals INC (UPC)'s financial leverage. This ratio compares the total debt to total equity, indicating the extent to which the company is using borrowed money to finance its assets versus using its own equity. A high ratio suggests higher financial risk, as the company has a greater reliance on debt. The debt-to-equity ratio for Universe Pharmaceuticals INC (UPC) and its comparison against industry averages can offer valuable context. Here's a general guide to interpreting debt-to-equity ratios:

• Low Ratio (Below 1): Indicates that the company has more equity than debt, suggesting lower financial risk.
• Moderate Ratio (1 to 2): Indicates a balanced approach to financing, with a reasonable mix of debt and equity.
• High Ratio (Above 2): Indicates that the company relies more on debt, which can increase financial risk.

Recent activities, such as new debt issuances, changes in credit ratings, or any refinancing efforts, also provide insight into Universe Pharmaceuticals INC (UPC)'s financial strategy. Credit ratings, assigned by agencies like Standard & Poor's, Moody's, and Fitch, reflect the creditworthiness of the company, influencing the interest rates it can secure on its debt.

Balancing debt and equity is a strategic decision for Universe Pharmaceuticals INC (UPC). Debt financing can provide capital for growth without diluting ownership, but it also introduces fixed interest payments and the risk of default. Equity financing, on the other hand, does not require fixed payments but dilutes ownership. Universe Pharmaceuticals INC (UPC)'s approach to balancing these two forms of financing impacts its financial flexibility and long-term stability. For example, consider a hypothetical scenario:

In this scenario, Universe Pharmaceuticals INC (UPC) increased its debt, but also grew its equity, resulting in a slightly higher, but still manageable, debt-to-equity ratio. This indicates a balanced approach to financing growth.

More information on Universe Pharmaceuticals INC (UPC)'s financial health can be found here: Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors

Universe Pharmaceuticals INC (UPC) Liquidity and Solvency

Liquidity and solvency are vital indicators of a company's financial health, revealing its ability to meet short-term obligations and long-term liabilities, respectively. For Universe Pharmaceuticals INC (UPC), assessing these aspects provides insights into its operational efficiency and financial stability.

Assessing Universe Pharmaceuticals INC (UPC)'s Liquidity:

• Current and Quick Ratios: These ratios measure UPC's ability to cover its short-term liabilities with its current assets. The current ratio is calculated by dividing current assets by current liabilities, while the quick ratio excludes inventory from current assets to provide a more conservative measure.
• Analysis of Working Capital Trends: Monitoring UPC's working capital, which is the difference between its current assets and current liabilities, can reveal trends in its operational efficiency and short-term financial health.
• Cash Flow Statements Overview: A review of UPC's cash flow statements, including operating, investing, and financing cash flows, offers insights into how the company generates and uses cash. Trends in these cash flows can indicate the company's ability to fund its operations, invest in growth, and manage its debt.
• Potential Liquidity Concerns or Strengths: Identifying any potential liquidity concerns or strengths is crucial for investors. This involves assessing UPC's ability to meet its short-term obligations, manage its working capital effectively, and generate sufficient cash flow to support its operations.

A detailed look into these areas would give stakeholders a clearer picture of UPC's financial resilience and its capacity to navigate short-term financial challenges.

As of the fiscal year 2024, here's a general overview of what liquidity analysis might entail for Universe Pharmaceuticals INC (UPC):

For more insights into Universe Pharmaceuticals INC (UPC)'s financial health, you can read: Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors

Universe Pharmaceuticals INC (UPC) Valuation Analysis

Determining whether Universe Pharmaceuticals INC (UPC) is overvalued or undervalued requires examining several key financial metrics and market indicators.

Here’s a breakdown of essential valuation factors:

• Price-to-earnings (P/E) ratio: UPC has a P/E ratio of 0.0x.
• Price-to-book (P/B) ratio: Information on the P/B ratio for UPC is not available in the provided context.
• Enterprise value-to-EBITDA (EV/EBITDA) ratio: Specific EV/EBITDA data is not available in the provided context.

These ratios provide insights into how the market values UPC relative to its earnings, book value, and cash flow. However, with a 0.0x P/E ratio, additional context is needed for a comprehensive valuation.

Analyzing the stock price trends can reveal market sentiment and potential overvaluation or undervaluation. Here’s what the data indicates:

• 1-Year Change: -99.7%, reflecting a significant downward trend over the past year.
• Year-to-date (YTD) Change: -85.4%, showing continued negative momentum.
• 52-Week Range: $2.51 to $2,592.00, indicating substantial volatility.

Despite the negative trends, in the most recent 2 weeks, UPC has outperformed the stock market by returning +28.0%, while the SPY returned -6.3%.

For companies that distribute dividends, the dividend yield and payout ratio are crucial valuation indicators. However, for Universe Pharmaceuticals INC (UPC):

• Dividend Yield: The current dividend yield as of February 28, 2025, is 0.00%.
• Dividend Payout: The current TTM (trailing twelve months) dividend payout as of February 28, 2025, is $0.00.

Given the 0.00% dividend yield, UPC is not currently providing income to investors through dividends.

Analyst consensus can offer valuable insights into stock valuation. However, comprehensive analyst forecasts are currently unavailable for UPC.

Additional financial data includes:

• Market Capitalization: $1.36 million.
• Revenue: $26.73 million in trailing twelve-month revenue.
• Gross Margin: N/A.
• Operating Margin: -13.5%.
• Net Margin: -69.4%.
• Cash and Debt: $11.39 million in cash and $6.51 million in debt, resulting in a net cash position of $4.88 million.

The company's negative operating and net margins, along with significant revenue decline (-30.2% year-over-year), suggest financial challenges.

For more insights into the company's direction, see: Mission Statement, Vision, & Core Values of Universe Pharmaceuticals INC (UPC).

Key financial ratios include:

These metrics indicate the company's ability to cover short-term liabilities and the efficiency of equity and asset utilization.

Considering the available data, Universe Pharmaceuticals INC (UPC) exhibits a complex financial profile. The lack of a positive P/E ratio, significant negative trends in stock performance, and negative profit margins suggest caution. Investors should conduct thorough due diligence and consider both quantitative and qualitative factors before making investment decisions.

Universe Pharmaceuticals INC (UPC) Risk Factors

Investing in Universe Pharmaceuticals INC (UPC) involves navigating a complex landscape of both internal and external risk factors. These risks can significantly impact the company's financial health and future prospects. Understanding these challenges is crucial for investors. Here's a breakdown of key risk areas:

Industry Competition:

• UPC operates in the highly competitive pharmaceutical industry in China.
• The company faces competition from both domestic and international pharmaceutical companies, including those with greater financial and technical resources Mission Statement, Vision, & Core Values of Universe Pharmaceuticals INC (UPC)..
• Increased competition could lead to price reductions, reduced profit margins, and loss of market share for UPC.

Regulatory Changes:

• The pharmaceutical industry is subject to extensive government regulation, including regulations related to drug development, manufacturing, marketing, and sales.
• Changes in these regulations could increase UPC's compliance costs, delay product launches, or restrict its ability to market and sell its products.
• For instance, new policies regarding GMP (Good Manufacturing Practice) certificates in Jiangxi Province required facility maintenance and upgrades, impacting operations and potentially delaying approvals.

Market Conditions:

• Economic conditions in China and globally can affect the demand for UPC's products.
• Changes in healthcare policies, insurance coverage, or consumer preferences could also impact sales.
• A declining revenue trend has been observed, with a 22% decrease in the top line in the past year and a 31% fall in revenue over three years which has contributed to a low price-to-sales ratio.

Operational Risks:

• UPC's operations are subject to various risks, including manufacturing disruptions, supply chain issues, and product quality problems.
• The company's reliance on third-party suppliers and distributors also exposes it to risks beyond its direct control.

Financial Risks:

• UPC's financial performance has been poor, with declining revenue and negative earnings. For the trailing 12 months ending March 31, 2024, Universe Pharmaceuticals earnings were -$18.5 million.
• The company's share price has been volatile, and it has underperformed the US market and the US Pharmaceuticals industry over the past year.
• The company's price-to-sales ratio is low, which may indicate that the market has concerns about its future growth prospects.

Strategic Risks:

• UPC's growth strategy relies on expanding its product portfolio and market reach.
• However, the company may face challenges in developing and commercializing new products, and its expansion efforts may not be successful.

Recent Challenges:

• Delisting Notice: In February 2025, UPC received a delisting notice from Nasdaq because its share price had closed below $1 per share for 30 consecutive business days. While the company requested a hearing, there's no guarantee of compliance.
• Delayed Annual Report: UPC faced potential delisting from Nasdaq due to the delayed filing of its Annual Report for the fiscal year 2024.
• Share Consolidation: In March 2025, UPC announced a share consolidation plan, consolidating 40 ordinary shares into one share.

Mitigation Strategies:

While specific mitigation strategies are not detailed, companies often employ several tactics to address these risks:

• Diversification: Expanding into new product lines or geographic markets to reduce reliance on specific areas.
• Strategic Partnerships: Collaborating with other companies to share resources and expertise.
• Cost Control: Implementing measures to reduce operating expenses and improve profitability.
• Compliance Programs: Establishing robust systems and processes to ensure compliance with regulations.

Volatility:

UPC's share price has been volatile. Over the past year, UPC's weekly volatility has decreased from 41% to 28%, but is still higher than 75% of US stocks.

Investors should carefully consider these risks and uncertainties before investing in UPC. Reviewing the company's filings with the Securities and Exchange Commission (SEC) can provide additional insights into its risk profile.

Universe Pharmaceuticals INC (UPC) Growth Opportunities

Universe Pharmaceuticals INC (UPC) faces a complex landscape of both challenges and opportunities as it navigates the pharmaceutical market. While recent financial data reveals some difficulties, strategic initiatives and market trends suggest potential avenues for growth. Breaking Down Universe Pharmaceuticals INC (UPC) Financial Health: Key Insights for Investors

One of the primary challenges for UPC is its recent financial performance. The company's revenue for the half-year ending March 31, 2024, was $12.88 million, a -46.76% decrease. This brought the trailing twelve-month revenue to $26.73 million, a -22.33% year-over-year decline. Additionally, the company's financial health indicators reveal a -69.4% profit margin and a -50.2% return on equity.

Despite these challenges, several factors could drive future growth for UPC:

• Expansion into New Markets: Recent announcements of expansion into new global markets have fueled investor optimism.
• Strategic Partnerships: Partnerships with global distributors have the potential to significantly expand UPC's market reach and boost future sales growth.
• Product Innovation: Ongoing research into natural medicine products positions UPC at the forefront of the industry, attracting investor interest and driving potential revenue.
• Strong Cash Flow: Analysts have noted UPC's robust cash flow positioning, which suggests an enhanced capacity for reinvestment in product development.
• New Product Launches: The enthusiastic reception of recent product launches is propelling upward trends in stock performance.

To capitalize on these opportunities and address its challenges, UPC may focus on the following strategic initiatives:

• Online Sales Channels: Developing online sales channels to complement offline efforts can help UPC seize more opportunities in the fast-evolving market.
• Product Line Expansion: Expanding its repertoire of products and leadership in the industry through acquisitions, such as Atmosphere Engineering Company, can bolster UPC's offerings and technical competencies.
• Focus on Key Growth Drivers: Continue investment in the beverage segment to drive top-line growth.
• Refresh Legacy Products: Refreshing legacy products can improve top-line growth in the instant noodles segment.

Considering the current market trends, UPC's focus on traditional Chinese medicine aligns with the increasing consumer preferences for alternative medicine. This positions the company well to cater to the growing demand for health products tailored to elder care and those focused on chronic condition treatments and cold and flu medications.

While analyst forecasts are currently unavailable for UPC, the company's ability to innovate and adjust its strategies will be crucial for realizing its potential in the evolving pharmaceutical landscape. The following data provides context for UPC's current financial standing: