By Brad Sorensen, CFA
OTCQB:PBSV
READ THE FULL PBSV RESEARCH REPORT
Pharma-Bio Serv (OTCQB:PBSV) announced results for the quarter ended July 31, 2025. The investments and decisions the company made over the past year that caused PBSV to take a step are showing the benefits we expected to begin to see. We are further encouraged by the CEO, Mr. Sanchez, noting that, “We…are preparing for the immediate commencement of several significant processes.” After a period of retrenchment and reorganization, we are excited that PBSV appears to be moving into a growth period again and urge investors to take a look at PBSV at this inflection point.
PBSV increased margin percentage and increased revenue from Europe during the quarter, continuing a trend indicating operations are becoming more streamlined and cost-efficient. The company had revenues for the quarter of $2.0 million, which we believe will be the low quarterly point as growth measures begin to take effect. Most encouraging was the increase in margin percentage and the continued increase in revenues from the European region.
We have believed the company needed to invest in improved technology and expand its presence in the marketplace for some time, while bringing in new customers and fostering profitable partnerships, and are pleased to see that the company has made those investments and is now starting to see the benefits of those difficult choices. The previous few quarters were certainly disappointing, but we are now starting to see the benefits of those investments. Sometimes a company must take a step back in order to move forward in a meaningful way, and we believe this is one of those cases that is now starting to play out in a positive way.
For investors, however, the company continues to focus on rewarding shareholders. Pharma-Bio Serv again paid a dividend of $0.075 per share for shareholders of record as of February 28, 2025, and we believe management is committed to continuing to pay this dividend. This announcement continued a trend for the company of rewarding shareholders with a healthy dividend. We believe this makes a nice combination and urge investors to look at the under-the-radar stock for a potential addition to a portfolio.
Additionally, the balance sheet continues to look solid. The cash on hand is impressive at $4.0 million, but that’s not the whole story. As we’ve discussed before, the company has done something with that excess cash that we believe is much smarter and will benefit the company and shareholders—management has decided to invest around $6.8 million in US Treasury Bills. With recent yields on T-bills between 4-5%, this move allows the company to hold cash equivalents that are actually earning a nice yield, while remaining safe and liquid—a win-win for investors and the company, and adding to the revenue for Pharma-Bio Serv. Additionally, the solid liquidity of the company means that management has the internal funds needed to continue to make the investments that will solidify PBSV on the growth trajectory investors are now beginning to see.
We believe that company management has made tough decisions, and we are now beginning to see the benefits of those moves. The company continues to have a solid business model in our view, and we are pleased to see investments being made in expanding that business. These facts continue to lead us to continue to have a positive view on PBSV stock, and we are looking forward to seeing continued progress in 2025 and into next year.
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