Comparing Sonoma Pharmaceuticals (NASDAQ:SNOA) & Amarin (NASDAQ:AMRN)

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

Analyst Ratings

This is a breakdown of recent recommendations for Amarin and Sonoma Pharmaceuticals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amarin	2	1	0	0	1.33
Sonoma Pharmaceuticals	1	0	0	0	1.00

Amarin currently has a consensus target price of $13.00, indicating a potential downside of 9.03%. Given Amarin’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Amarin is more favorable than Sonoma Pharmaceuticals.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Amarin	-14.56%	-0.20%	-0.14%
Sonoma Pharmaceuticals	-10.33%	-21.41%	-6.08%

Insider & Institutional Ownership

22.3% of Amarin shares are held by institutional investors. Comparatively, 2.0% of Sonoma Pharmaceuticals shares are held by institutional investors. 4.2% of Amarin shares are held by company insiders. Comparatively, 1.0% of Sonoma Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Amarin and Sonoma Pharmaceuticals”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amarin	$213.65 million	1.41	-$38.80 million	($0.99)	-14.43
Sonoma Pharmaceuticals	$21.92 million	0.30	-$3.17 million	($1.22)	-1.12

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

Volatility and Risk

Amarin has a beta of 0.81, meaning that its share price is 19% 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.

Summary

Amarin beats Sonoma Pharmaceuticals on 9 of the 13 factors compared between the two stocks.

About Amarin

Amarin Corporation plc, a pharmaceutical company, engages in the development and commercialization of therapeutics for the treatment of cardiovascular diseases in the United States, European countries, Canada, Lebanon, and the United Arab Emirates. The company offers VASCEPA, a prescription-only omega-3 fatty acid product, used as an adjunct to diet for reducing triglyceride levels in adult patients with severe hypertriglyceridemia. It sells its products principally to wholesalers and specialty pharmacy providers. The company has a collaboration with Mochida Pharmaceutical Co., Ltd. to develop and commercialize drug products and indications based on the active pharmaceutical ingredient in Vascepa. The company was formerly known as Ethical Holdings plc and changed its name to Amarin Corporation plc in 1999. Amarin Corporation plc was incorporated in 1989 and is headquartered in Dublin, Ireland.

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.