Sonoma Pharmaceuticals (NASDAQ:SNOA – Get Free Report) and Vanda Pharmaceuticals (NASDAQ:VNDA – Get Free Report) are both small-cap healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.
Analyst Ratings
This is a summary of current ratings and target prices for Sonoma Pharmaceuticals and Vanda Pharmaceuticals, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sonoma Pharmaceuticals | 1 | 0 | 0 | 0 | 1.00 |
| Vanda Pharmaceuticals | 2 | 1 | 6 | 0 | 2.44 |
Vanda Pharmaceuticals has a consensus target price of $13.50, suggesting a potential upside of 256.58%. Given Vanda Pharmaceuticals’ stronger consensus rating and higher probable upside, analysts plainly believe Vanda Pharmaceuticals is more favorable than Sonoma Pharmaceuticals.
Profitability
This table compares Sonoma Pharmaceuticals and Vanda Pharmaceuticals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sonoma Pharmaceuticals | -10.33% | -21.41% | -6.08% |
| Vanda Pharmaceuticals | -119.87% | -62.70% | -37.53% |
Valuation and Earnings
This table compares Sonoma Pharmaceuticals and Vanda Pharmaceuticals”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sonoma Pharmaceuticals | $19.53 million | 0.28 | -$3.17 million | ($1.22) | -0.94 |
| Vanda Pharmaceuticals | $216.10 million | 1.06 | -$220.47 million | ($4.62) | -0.82 |
Sonoma Pharmaceuticals has higher earnings, but lower revenue than Vanda Pharmaceuticals. Sonoma Pharmaceuticals is trading at a lower price-to-earnings ratio than Vanda Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
1.9% of Sonoma Pharmaceuticals shares are held by institutional investors. Comparatively, 88.1% of Vanda Pharmaceuticals shares are held by institutional investors. 1.0% of Sonoma Pharmaceuticals shares are held by insiders. Comparatively, 10.7% of Vanda Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Sonoma Pharmaceuticals has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Vanda Pharmaceuticals has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.
Summary
Vanda Pharmaceuticals beats Sonoma Pharmaceuticals on 8 of the 14 factors compared between the two stocks.
About Sonoma Pharmaceuticals
Sonoma Pharmaceuticals, Inc., develops and produces stabilized hypochlorous acid (HOCl) products for wound care, animal health care, eye care, oral care, and dermatological conditions in the United States, Latin America, Europe, Asia, and internationally. The company offers Regenacyn, a prescription scar gel; Pediacyn, a pediatric dermatology and wound care product for over-the-counter (OTC) use; Epicyn, an Antimicrobial Facial Cleanser; Levicyn, an HOCl based prescription and OTC product to use and relieve skin irritations, lacerations, abrasions, and burns; Celacyn, a scar management gel; and SebuDerm to manage and relieve the burning, itching, erythema, scaling, and pain associated with seborrhea and seborrheic dermatitis. It also provides Gramaderm for the treatment of topical mild to moderate acne; Microcyn, a HOCl-based topical line of products designed to stimulate expedited healing by targeting a wide range of pathogens; Ocucyn eyelid and eyelash cleanser; Microdacyn60 oral care solution for the treatment of mouth and throat infections; and Podiacyn, a foot care product. In addition, the company offers MicrocynAH, an HOCl-based solution designed to relieve common symptoms of hot spots, scratches, skin rashes post-surgical sites, and irritated animal skin for healing; MicrocynVS, a veterinarian-strength animal care product used in vet clinics and animal hospitals; Nanocyn, a hospital-grade disinfectant; Acuicyn, an antimicrobial prescription solution for the treatment of blepharitis and the daily hygiene of eyelids and lashes; MucoClyns for the use in emergencies and safe to use on mucous membranes, cuts, abrasions, burns, and body surfaces; Endocyn root canal irrigation solutions; and Sinudox for nasal irrigation. The company was formerly known as Oculus Innovative Sciences, Inc. and changed its name to Sonoma Pharmaceuticals, Inc. in December 2016. Sonoma Pharmaceuticals, Inc. was incorporated in 1999 and is based in Boulder, Colorado.
About Vanda Pharmaceuticals
Vanda Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of therapies to address high unmet medical needs worldwide. The company’s marketed products include HETLIOZ to treat non-24-hour sleep-wake disorders; and Fanapt oral tablets for the treatment of schizophrenia. Its pipeline products include HETLIOZ (tasimelteon) to treat jet lag disorder, insomnia, delayed sleep phase disorder, sleep disturbances in autism spectrum disorder, and pediatric Non-24; Fanapt (iloperidone) for the treatment of bipolar I disorder and Parkinson’s disease psychosis, as well as a long acting injectable (LAI) formulation to treat schizophrenia; and Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist to treat gastroparesis, motion sickness, atopic dermatitis, and COVID-19 pneumonia. The company’s pipeline products also include VTR-297, a small molecule histone deacetylase inhibitor to treat hematologic malignancies and with potential use as a treatment for various oncology indications; VQW-765, a small molecule nicotinic acetylcholine receptor partial agonist to treat performance anxiety and psychiatric disorders; VHX-896, an active metabolite of iloperidone; and antisense oligonucleotide molecules. In addition, it offers a portfolio of cystic fibrosis transmembrane conductance regulator activators and inhibitors that include VSJ-110 for the treatment of dry eye and ocular inflammation; and VPO-227 for the treatment of secretory diarrhea disorders comprising cholera. Vanda Pharmaceuticals Inc. was incorporated in 2002 and is headquartered in Washington, the District of Columbia.
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