Contrasting Sonoma Pharmaceuticals (NASDAQ:SNOA) and NovoCure (NASDAQ:NVCR)

Sonoma Pharmaceuticals (NASDAQ:SNOA) and NovoCure (NASDAQ:NVCR) are both small-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Risk and Volatility

Sonoma Pharmaceuticals has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500. Comparatively, NovoCure has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Insider and Institutional Ownership

2.0% of Sonoma Pharmaceuticals shares are owned by institutional investors. Comparatively, 84.6% of NovoCure shares are owned by institutional investors. 3.9% of Sonoma Pharmaceuticals shares are owned by company insiders. Comparatively, 6.3% of NovoCure shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Sonoma Pharmaceuticals and NovoCure”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	$13.97 million	0.28	-$4.84 million	($4.02)	-0.61
NovoCure	$605.22 million	3.01	-$207.04 million	($1.56)	-10.61

Sonoma Pharmaceuticals has higher earnings, but lower revenue than NovoCure. NovoCure is trading at a lower price-to-earnings ratio than Sonoma Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for Sonoma Pharmaceuticals and NovoCure, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonoma Pharmaceuticals	0	0	0	0	0.00
NovoCure	0	2	4	0	2.67

NovoCure has a consensus target price of $34.50, suggesting a potential upside of 108.46%. Given NovoCure’s stronger consensus rating and higher possible upside, analysts clearly believe NovoCure is more favorable than Sonoma Pharmaceuticals.

Profitability

This table compares Sonoma Pharmaceuticals and NovoCure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sonoma Pharmaceuticals	-26.82%	-68.98%	-26.39%
NovoCure	-25.93%	-41.48%	-12.74%

Summary

NovoCure beats Sonoma Pharmaceuticals on 11 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 NovoCure

NovoCure Limited, an oncology company, engages in the development, manufacture, and commercialization of tumor treating fields (TTFields) devices for the treatment of solid tumor cancers in the United States, Germany, Japan, Greater China, and internationally. The company’s TTFields devices include Optune Gio and Optune Lua. It also has ongoing clinical trials investigating TTFields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer, and ovarian cancer. NovoCure Limited was incorporated in 2000 and is headquartered in Saint Helier, Jersey.