Sonoma Pharmaceuticals (NASDAQ:SNOA) and ArQule (NASDAQ:ARQL) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.
Risk & Volatility
Sonoma Pharmaceuticals has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, ArQule has a beta of 2.22, indicating that its share price is 122% more volatile than the S&P 500.
This is a summary of recent ratings and price targets for Sonoma Pharmaceuticals and ArQule, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ArQule has a consensus target price of $12.20, suggesting a potential upside of 36.16%. Given ArQule’s stronger consensus rating and higher possible upside, analysts clearly believe ArQule is more favorable than Sonoma Pharmaceuticals.
This table compares Sonoma Pharmaceuticals and ArQule’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
7.7% of Sonoma Pharmaceuticals shares are held by institutional investors. Comparatively, 77.9% of ArQule shares are held by institutional investors. 6.5% of Sonoma Pharmaceuticals shares are held by company insiders. Comparatively, 13.8% of ArQule shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Sonoma Pharmaceuticals and ArQule’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sonoma Pharmaceuticals||$18.97 million||0.42||-$11.80 million||N/A||N/A|
|ArQule||$25.76 million||41.83||-$15.48 million||($0.16)||-56.00|
Sonoma Pharmaceuticals has higher earnings, but lower revenue than ArQule.
ArQule beats Sonoma Pharmaceuticals on 10 of the 12 factors compared between the two stocks.
Sonoma Pharmaceuticals Company Profile
Sonoma Pharmaceuticals, Inc., a specialty pharmaceutical company, develops and markets solutions for the treatment of chronic skin conditions and advanced tissue care in the United States and internationally. The company offers Levicyn, a hypochlorous acid (HOCl) based prescription product to manage and relieve burning, itching, and pain experienced with various types of dermatoses; Celacyn gel, a product indicated to promote healing through the management of new and old scars resulting from surgical procedures and trauma wounds or burns; SebuDerm, a product indicated to manage and relieve the burning, itching, pain, and distraction associated with seborrhea and seborrheic dermatitis; and Ceramax, a Lipogrid based skin barrier cream indicated to relieve and manage the burning and itching associated with various skin conditions. It also provides Mondoxyne, a doxycycline-based prescription oral tetracycline antibiotic used as a treatment for acne vulgaris; Acuicyn, a HOCl-based product indicated to relieve itch and inflammation while helping to keep areas around the eye clean; and Microcyn, a line of products designed to stimulate expedited healing by targeting various pathogens, as well as antibiotic-resistant strains that slow natural healing of wounds. In addition, the company offers MicrocynAH and MicrocynVS, which are HOCl-based solutions designed to relieve common symptoms of hot spots, scratches, skin rashes post-surgical sites, and irritated animal skin for healing; and Pediacyn, Epicyn, Gramaderm, and Microdacyn for dermatoses, scar management, and acne. 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 headquartered in Petaluma, California.
ArQule Company Profile
ArQule, Inc., a biopharmaceutical company, researches and develops therapeutics for the treatment of cancer and rare diseases in the United States. The company's pipeline includes ARQ 531, an orally bioavailable, potent and reversible dual inhibitor of wild type and C481S-mutant Bruton's tyrosine kinase that is in Phase I trial for patients with B-cell malignancies refractory to other therapeutic options; and miransertib (ARQ 092), a potent and selective inhibitor of the protein kinase B (AKT), a serine/threonine kinase, which is in Phase Ib in combination with the hormonal therapy and anastrozole in patients with advanced endometrial cancer. Its pipeline also comprises ARQ 75, a potent and selective inhibitor of AKT that is in Phase I clinical development for solid tumors harboring AKT, phosphoinositide 3-kinase or phosphatase, and tensin homolog loss mutations. In addition, the company's pipeline includes Derazantinib (ARQ 087), a multi-kinase inhibitor designed to preferentially inhibit the fibroblast growth factor receptor (FGFR) family of kinases that is in a registrational clinical trial in intrahepatic cholangiocarcinoma in patients with FGFR2 fusions. ArQule, Inc. has license agreements with Basilea Pharmaceutica Limited and Roivant Sciences Ltd. The company was founded in 1993 and is headquartered in Burlington, Massachusetts.
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