3SBio (SSRX) & Sonoma Pharmaceuticals (SNOA) Critical Analysis

Sonoma Pharmaceuticals (NASDAQ: SNOA) and 3SBio (NASDAQ:SSRX) are both small-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Sonoma Pharmaceuticals and 3SBio, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sonoma Pharmaceuticals 0 1 1 0 2.50
3SBio 0 0 1 0 3.00

Sonoma Pharmaceuticals presently has a consensus target price of $10.50, suggesting a potential upside of 92.66%. Given Sonoma Pharmaceuticals’ higher probable upside, equities analysts clearly believe Sonoma Pharmaceuticals is more favorable than 3SBio.

Risk & Volatility

Sonoma Pharmaceuticals has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500. Comparatively, 3SBio has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Earnings and Valuation

This table compares Sonoma Pharmaceuticals and 3SBio’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sonoma Pharmaceuticals $12.82 million 1.87 $9.27 million $1.78 3.06
3SBio N/A N/A N/A $0.73 22.73

Sonoma Pharmaceuticals has higher revenue and earnings than 3SBio. Sonoma Pharmaceuticals is trading at a lower price-to-earnings ratio than 3SBio, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

9.2% of Sonoma Pharmaceuticals shares are owned by institutional investors. 13.3% of Sonoma Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Sonoma Pharmaceuticals and 3SBio’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sonoma Pharmaceuticals 47.68% -43.23% -35.78%
3SBio N/A N/A N/A

Summary

Sonoma Pharmaceuticals beats 3SBio on 6 of the 11 factors compared between the two stocks.

About Sonoma Pharmaceuticals

Sonoma Pharmaceuticals, Inc., formerly Oculus Innovative Sciences, Inc., is a specialty pharmaceutical company that develops and markets solutions for the treatment of dermatological conditions and advanced tissue care. The Company’s product portfolio consists of dermatology and advanced tissue care products based upon its technologies, such as Microcyn and Lipogrid. Microcyn is a small-molecule oxychlorine compound with antimicrobial and anti-inflammatory properties that, in clinical settings, reduces itch and pain associated with dermal irritations and wounds, such as sores, injuries and ulcers of dermal tissue. Lipogrid Technology contains selected lipids and a lipid precursor designed to penetrate the bilayers of the skin by blending with the natural lipid building blocks. Its products serve over five million patients across the globe by reducing infections, itch, pain, scarring and inflammatory responses. Its products are sold throughout the United States and internationally.

About 3SBio

3SBio Inc. is a biotechnology company in the People’s Republic of China with research and development, manufacturing, and marketing capabilities focusing on bio-pharmaceutical products. The Company recombinant, or genetically engineered, protein-based products and product candidates are designed to address markets with unmet medical needs in nephrology, oncology, supportive cancer care, inflammation and infectious diseases. Its principal products are EPIAO and TPIAO. In addition, it has two legacy products, Intefen and Inleusin; and an in-licensed product, Iron Sucrose Supplement. The Company focuses on its research and development efforts on both novel and validated protein-based therapeutics for the treatment of diseases in the areas of nephrology, oncology, supportive cancer care, inflammation and infectious diseases, and other selected areas. In May 2013, the Company merged with Decade Sunshine Limited and Decade Sunshine Merger Sub.

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