Sonnet BioTherapeutics (NASDAQ:SONN – Get Free Report) and Eliem Therapeutics (NASDAQ:ELYM – Get Free Report) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.
Risk and Volatility
Sonnet BioTherapeutics has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Eliem Therapeutics has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.
Profitability
This table compares Sonnet BioTherapeutics and Eliem Therapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sonnet BioTherapeutics | -13,072.74% | -3,333.24% | -264.85% |
| Eliem Therapeutics | N/A | -33.55% | -32.29% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sonnet BioTherapeutics | 0 | 0 | 2 | 0 | 3.00 |
| Eliem Therapeutics | 0 | 1 | 0 | 0 | 2.00 |
Sonnet BioTherapeutics presently has a consensus target price of $205.70, indicating a potential upside of 14,805.80%. Eliem Therapeutics has a consensus target price of $6.00, indicating a potential upside of 136.22%. Given Sonnet BioTherapeutics’ stronger consensus rating and higher possible upside, analysts plainly believe Sonnet BioTherapeutics is more favorable than Eliem Therapeutics.
Valuation & Earnings
This table compares Sonnet BioTherapeutics and Eliem Therapeutics’ gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sonnet BioTherapeutics | $173,303.00 | 13.94 | -$29.72 million | N/A | N/A |
| Eliem Therapeutics | N/A | N/A | -$45.24 million | ($1.47) | -1.73 |
Sonnet BioTherapeutics has higher revenue and earnings than Eliem Therapeutics.
Institutional and Insider Ownership
36.8% of Sonnet BioTherapeutics shares are owned by institutional investors. Comparatively, 61.8% of Eliem Therapeutics shares are owned by institutional investors. 2.0% of Sonnet BioTherapeutics shares are owned by insiders. Comparatively, 4.7% of Eliem Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
Sonnet BioTherapeutics beats Eliem Therapeutics on 6 of the 11 factors compared between the two stocks.
About Sonnet BioTherapeutics
Sonnet BioTherapeutics Holdings, Inc., a clinical stage oncology-focused biotechnology company, develops platform for biologic medicines of single or bispecific action. The company develops fully human albumin binding technology, which utilizes human single chain antibodies fragment that binds to and hitch-hikes on human serum albumin for transport to target tissues. Its lead product candidate is SON-1010, a fully human version of interleukin 12 for the treatment non-small cell lung cancer, and head and neck cancer and is under phase 1 trial. The company is also developing SON-080, a fully human version of interleukin 6 for chemotherapy-induced peripheral neuropathy and diabetic peripheral neuropathy and is under Phase Ib/IIa study; and SON-1210, a bispecific compound developed for solid tumor indications, including colorectal cancer. It has a license agreement with New Life Therapeutics Pte, LTD. to develop and commercialize pharmaceutical preparations containing a specific recombinant human interleukin-6. The company is headquartered in Princeton, New Jersey.
About Eliem Therapeutics
Eliem Therapeutics, Inc., a clinical-stage biotechnology company, focuses on developing therapies for neuronal excitability disorders to address unmet needs in chronic pain, psychiatry, epilepsy, and other disorders of the peripheral and central nervous systems. Its lead drug candidate is ETX-123, a Kv7.2/3 potassium channel opener, which is in preclinical for the treatment of neuronal excitability disorders, such as epilepsy, pain, depression, and others; and ETX-155 for the treatment of major depressive disorder and focal onset seizures that is in Phase 2a clinical trial. The company was incorporated in 2018 and is headquartered in Redmond, Washington.
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