Critical Contrast: Ocular Therapeutix (NASDAQ:OCUL) and Sonoma Pharmaceuticals (NASDAQ:SNOA)

Sonoma Pharmaceuticals (NASDAQ:SNOA) and Ocular Therapeutix (NASDAQ:OCUL) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Earnings & Valuation

This table compares Sonoma Pharmaceuticals and Ocular Therapeutix”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sonoma Pharmaceuticals	$16.94 million	0.38	-$3.46 million	($2.19)	-1.73
Ocular Therapeutix	$55.78 million	43.46	-$193.51 million	($1.44)	-7.90

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

Insider and Institutional Ownership

2.0% of Sonoma Pharmaceuticals shares are owned by institutional investors. Comparatively, 59.2% of Ocular Therapeutix shares are owned by institutional investors. 24.6% of Sonoma Pharmaceuticals shares are owned by insiders. Comparatively, 2.3% of Ocular Therapeutix shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Sonoma Pharmaceuticals and Ocular Therapeutix, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonoma Pharmaceuticals	1	0	0	0	1.00
Ocular Therapeutix	1	1	12	0	2.79

Ocular Therapeutix has a consensus target price of $22.56, indicating a potential upside of 98.20%. Given Ocular Therapeutix’s stronger consensus rating and higher possible upside, analysts plainly believe Ocular Therapeutix is more favorable than Sonoma Pharmaceuticals.

Risk and Volatility

Sonoma Pharmaceuticals has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500. Comparatively, Ocular Therapeutix has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sonoma Pharmaceuticals	-20.57%	-45.46%	-13.95%
Ocular Therapeutix	-447.57%	-86.33%	-57.29%

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.

About Ocular Therapeutix

Ocular Therapeutix, Inc., a biopharmaceutical company, focuses on the formulation, development, and commercialization of therapies for diseases and conditions of the eye using its bioresorbable hydrogel-based formulation technology in the United States. The company markets DEXTENZA, a dexamethasone ophthalmic insert to treat post-surgical ocular inflammation and pain following ophthalmic surgery, as well as allergic conjunctivitis. It is developing AXPAXLI, an axitinib intravitreal implant that is in phase 3 trials for the treatment of wet age-related macular degeneration and other retinal diseases; PAXTRAVA, a travoprost intracameral implant, which is in phase 2 clinical trials for the treatment of open-angle glaucoma or ocular hypertension; OTX-CSI, a cyclosporine intracanalicular insert that has completed phase 2 clinical trials for the treatment of dry eye disease; and OTX-DED, a dexamethasone intracanalicular insert, which is in phase 2 clinical trials for the short-term treatment of the signs and symptoms of dry eye disease. In addition, the company offers modulator for intermediate and late dry age-related macular degeneration; and gene delivery for inherited retinal degenerations and protein biofactory indications. The company has a strategic collaboration with Regeneron Pharmaceuticals, Inc. (Regeneron) for the development and commercialization of products using the company’s sustained-release hydrogel in combination with Regeneron’s large molecule VEGF-targeting compounds for the treatment of retinal diseases; and AffaMed Therapeutics Limited for the development and commercialization of DEXTENZA and OTX-TIC. Ocular Therapeutix, Inc. was incorporated in 2006 and is headquartered in Bedford, Massachusetts.