OTC:PFHO
PACIFIC HEALTH CARE ORGANIZATION INC
A financially efficient OTC-listed healthcare provider demonstrating consistent revenue growth and strong profitability margins despite a modest market cap.
Key Metrics
Investment Thesis
Bull Case
Investors may consider this stock for its consistent double-digit growth trajectory in both revenue and earnings, coupled with a robust interest income stream that acts as a buffer against operational volatility.
Bear Case
The substantial accumulated deficit and the fact that cash on hand barely covers current liabilities suggest potential solvency concerns if operating performance stalls or regulatory costs increase significantly.
About PACIFIC HEALTH CARE ORGANIZATION INC
Pacific Health Care Organization Inc. provides essential healthcare services to diverse communities, leveraging a lean operational model focused on outpatient care and regional medical support.
Analysis
Management Discussion
Management has successfully driven revenue up from $5.7M in 2022 to $6.1M in 2024 while expanding net income from $0.5M to $0.9M over the same period, indicating effective cost management and pricing power.
Industry Overview
The OTC healthcare sector is characterized by consolidation trends where smaller, specialized providers face pressure from large hospital systems, yet niche operators can thrive through localized service delivery and cost efficiency.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $5.7M | $5.6M | $6.1M |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $5.7M | $5.6M | $6.1M |
| Operating Expenses | $5.1M | $5.0M | $5.2M |
| Operating Income | $666.1K | $678.5K | $852.6K |
| G&A | $705.6K | $553.5K | $734.1K |
| D&A | $34.0K | $37.5K | $34.1K |
| Depreciation | — | — | $13.3K |
| Other OpEx | $4.4M | $4.4M | $4.5M |
| Non-Operating Income | $27.2K | $409.9K | $411.1K |
| Interest Expense | — | — | $3.6K |
| Interest Income | $27.2K | $409.9K | $414.6K |
| Pre-Tax Income | $693.3K | $1.1M | $1.3M |
| Income Tax | $200.4K | $320.6K | $380.1K |
| Continuing Ops | $492.9K | $767.9K | $883.6K |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $492.9K | $767.9K | $883.6K |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $492.9K | $767.9K | $883.6K |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $11.9M | $11.7M | $12.3M |
| Cash & Equivalents | $2.0M | $2.6M | $2.1M |
| Accounts Receivable | $935.0K | $1.1M | $1.0M |
| Other Current Assets | $8.9M | $8.1M | $9.2M |
| Long-Term Assets | $154.1K | $141.0K | $97.5K |
| PP&E (Net) | $97.4K | $77.4K | $52.4K |
| Operating Leases | $50.1K | $56.5K | $0 |
| Other LT Assets | $6.6K | $7.1K | $45.1K |
| Total Assets | $12.1M | $11.8M | $12.4M |
| Current Liabilities | $708.9K | $1.0M | $745.6K |
| Accounts Payable | $263.0K | $159.8K | $148.1K |
| Current Leases | $39.6K | $44.5K | $0 |
| Taxes Payable | $3.1K | $296.5K | $68.7K |
| Other Current Liab | $70.5K | $30.9K | $68.8K |
| Long-Term Liabilities | $26.2K | $12.0K | $0 |
| LT Operating Leases | $10.5K | $12.0K | $0 |
| Other LT Liab | $15.7K | $0 | $0 |
| Total Liabilities | $735.1K | $1.0M | $745.6K |
| Shareholders' Equity | $11.3M | $10.8M | $11.7M |
| Paid-In Capital | $416.1K | $416.1K | $416.1K |
| Retained Earnings | $10.9M | $10.4M | $11.3M |
| Total L&E | $12.1M | $11.8M | $12.4M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $492.9K | $767.9K | $883.6K |
| Non-Cash Adjustments | $-46.2K | $-116.9K | $-38.7K |
| Working Capital Changes | $264.5K | $281.4K | $-169.8K |
| Cash from Operations | $711.2K | $932.4K | $675.1K |
| Capital Expenditures | $38.9K | $17.5K | $9.1K |
| Cash from Investing | $-8.8M | $806.8K | $-1.1M |
| Dividends Paid | — | $1.2M | $0 |
| Cash from Financing | $0 | $-1.2M | $35.3K |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-8.0M | $529.6K | $-423.5K |
| Beginning Cash | $10.1M | $2.0M | $2.5M |
| Ending Cash | $2.0M | $2.6M | $2.1M |
Frequently Asked Questions
How does PACIFIC HEALTH CARE ORGANIZATION INC make money?
The company derives its primary revenue from direct patient service fees and managed care contracts, supported by significant interest income generated from cash reserves held for operational liquidity.
What are the main risks for PFHO?
Limited liquidity as indicated by a negative change in cash balance despite positive operating cash flow; significant retained earnings deficit of $11.3M suggesting historical capital needs or past losses; exposure to regulatory changes affecting OTC healthcare providers; and reliance on non-operating interest income which may fluctuate with rate environments.
What is PFHO's competitive advantage?
Strong balance sheet with over $2.1M in cash providing financial flexibility; high net profit margin relative to industry peers due to controlled operating expenses of approximately $5.2M on $6.1M revenue; and consistent year-over-year top-line growth.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.