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

Profitability

This table compares Onconova Therapeutics and Sonoma Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Onconova Therapeutics -762.13% -558.97% -85.62%
Sonoma Pharmaceuticals 54.36% -44.24% -36.04%

Insider and Institutional Ownership

26.8% of Onconova Therapeutics shares are held by institutional investors. Comparatively, 9.8% of Sonoma Pharmaceuticals shares are held by institutional investors. 27.3% of Onconova Therapeutics shares are held by company insiders. Comparatively, 13.3% of Sonoma Pharmaceuticals 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.

Risk & Volatility

Onconova Therapeutics has a beta of 0.08, meaning that its share price is 92% less volatile than the S&P 500. Comparatively, Sonoma Pharmaceuticals has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Valuation & Earnings

This table compares Onconova Therapeutics and Sonoma Pharmaceuticals’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Onconova Therapeutics $2.36 million 6.43 -$22.15 million ($2.35) -0.66
Sonoma Pharmaceuticals $14.02 million 1.69 -$12.55 million $1.99 2.76

Sonoma Pharmaceuticals has higher revenue and earnings than Onconova Therapeutics. Onconova Therapeutics 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 breakdown of recent ratings and recommmendations for Onconova Therapeutics and Sonoma Pharmaceuticals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Onconova Therapeutics 0 0 3 0 3.00
Sonoma Pharmaceuticals 0 0 1 0 3.00

Onconova Therapeutics currently has a consensus target price of $8.00, suggesting a potential upside of 419.48%. Sonoma Pharmaceuticals has a consensus target price of $10.00, suggesting a potential upside of 81.82%. Given Onconova Therapeutics’ higher probable upside, analysts plainly believe Onconova Therapeutics is more favorable than Sonoma Pharmaceuticals.

Summary

Sonoma Pharmaceuticals beats Onconova Therapeutics on 7 of the 12 factors compared between the two stocks.

Onconova Therapeutics Company Profile

Onconova Therapeutics, Inc. is a clinical-stage biopharmaceutical company. The Company operates through the identification and development of oncology therapeutics segment. It is focused on discovering and developing small molecule drug candidates to treat cancer. The Company has created a targeted anti-cancer agents designed to work against specific cellular pathways that are important to cancer cells. It has over three clinical-stage product candidates and various preclinical programs that target kinases, cellular metabolism or cell division in preclinical development. The Company’s lead product candidate, rigosertib, is being tested in both intravenous (IV) and oral formulations as a single agent, and the oral formulation is also being tested in combination with azacitidine, in clinical trials for patients with myelodysplastic syndromes (MDS), and related cancers. Its other product candidates include Briciclib and Recilisib.

Sonoma Pharmaceuticals Company Profile

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.

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