Sonoma Pharmaceuticals, Inc. (NASDAQ: SNOA)

Sector: Healthcare Industry: Drug Manufacturers - Specialty & Generic CIK: 0001367083
Market Cap 4.89 Mn
P/B 1.43
P/E -1.45
P/S 0.28
ROIC (Qtr) -56.77
Div Yield % 0.00
Rev 1y % (Qtr) 22.03
Total Debt (Qtr) 655,000.00
Debt/Equity (Qtr) 0.19
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About

Sonoma Pharmaceuticals, Inc., often recognized by its stock symbol SNOA, is a prominent player in the global healthcare industry. The company specializes in the development, manufacturing, and distribution of stabilized hypochlorous acid (HOCl) products. These products are designed to provide safe and effective solutions for a wide range of applications, including wound care, eye care, oral care, dermatological conditions, podiatry, animal health care, and non-toxic disinfectants. Sonoma Pharmaceuticals' primary business activities revolve around...

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Investment thesis

Bull case

  • Healthy cash reserves of 2.56M provide 17.54x coverage of short-term debt 146000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 13.62M provides 20.80x coverage of total debt 655000, indicating robust asset backing and low credit risk.
  • Tangible assets of 13.62M provide exceptional 43.39x coverage of deferred revenue 314000, showing strong service capability backing.
  • Tangible assets of 13.62M provide robust 5.62x coverage of other current liabilities 2.42M, indicating strong asset backing.
  • R&D investment of 2.14M represents healthy 6.81x of deferred revenue 314000, indicating strong future innovation pipeline.

Bear case

  • Investment activities of (210000) provide weak support for R&D spending of 2.14M, which is -0.10x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (3.51M) provides insufficient coverage of deferred revenue obligations of 314000, which is -11.18x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (3.51M) shows concerning coverage of stock compensation expenses of 210000, with a -16.71 ratio indicating potential earnings quality issues.
  • Free cash flow of (3.72M) provides weak coverage of capital expenditures of 210000, with a -17.71 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (3.45M) show weak coverage of depreciation charges of 137000, with a -25.18 ratio indicating high capital intensity and potential reinvestment needs.

Geographical Breakdown of Revenue (2023)

Geographical Breakdown of Revenue (2023)

Peer comparison

Companies in the Drug Manufacturers - Specialty & Generic
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ZTS Zoetis Inc. 59.62 Bn 29.27 7.67 9.24 Bn
2 TAK Takeda Pharmaceutical Co Ltd 57.33 Bn 79.02 2.00 36.56 Bn
3 HLN Haleon plc 51.85 Bn 33.06 3.83 -
4 TEVA Teva Pharmaceutical Industries Ltd 39.45 Bn 27.98 2.29 17.09 Bn
5 UTHR UNITED THERAPEUTICS Corp 21.54 Bn 16.94 6.89 0.00 Bn
6 RGC Regencell Bioscience Holdings Ltd 16.16 Bn -4,510.00 0.00 -
7 ELAN Elanco Animal Health Inc 12.79 Bn 355.14 2.78 4.32 Bn
8 NBIX Neurocrine Biosciences Inc 12.71 Bn 26.56 4.44 0.42 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.18 38.12
EV to Cash from Ops. EV/CFO -0.68 -121.97
EV to Debt EV to Debt 3.65 403.43
EV to EBIT EV/EBIT -0.69 -55.05
EV to EBITDA EV/EBITDA -0.91 -57.64
EV to Free Cash Flow [EV/FCF] EV/FCF -0.64 -65.56
EV to Market Cap EV to Market Cap 0.49 -4.24
EV to Revenue EV/Rev 0.13 -1,205.44
Price to Book Value [P/B] P/B 1.43 43.48
Price to Earnings [P/E] P/E -1.45 -46.00
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.36
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.52
Dividend per Basic Share Div per Share (Qtr) 0.00 0.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.04
Interest Coverage Int. cover (Qtr) 0.00 -46.13
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1,300.00 -154.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -51.09 86,151.29
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.89
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 10.09 31.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 39.07 9.88
EBIT Growth (1y) % EBIT 1y % (Qtr) 7.70 91.77
EBT Growth (1y) % EBT 1y % (Qtr) 7.70 90.13
EPS Growth (1y) % EPS 1y % (Qtr) 20.41 -12.06
FCF Growth (1y) % FCF 1y % (Qtr) -2,682.64 -224.48
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 34.49 26.23
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.30 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.61 2.12
Current Ratio Curr Ratio (Qtr) 2.88 3.92
Debt to Equity Ratio Debt/Equity (Qtr) 0.19 -1.15
Interest Cover Ratio Int Coverage (Qtr) 0.00 -46.13
Times Interest Earned Times Interest Earned (Qtr) 0.00 -46.13
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -18.70 -59,714.97
EBIT Margin % EBIT Margin % (Qtr) -19.47 -60,539.44
EBT Margin % EBT Margin % (Qtr) -19.47 -64,118.78
Gross Margin % Gross Margin % (Qtr) 38.20 8,658.69
Net Profit Margin % Net Margin % (Qtr) -19.00 -64,120.53