Global healthcare leader Sonoma Pharmaceuticals, Inc. (SNOA) Shares soared to their 52-week high at $ 15.19 on December 11, 2020, after entering into an exclusive partnership with Crown Laboratories on its Microcyn skin care products. However, the stock lost 9.3% in the past month and 22.8% in the past three months to close Friday’s trading session at $ 5.67.
Additionally, its stocks are highly volatile and the company also reported disappointing financial results in the fiscal first quarter. It reported losses in the quarter and its revenue also declined. In addition, its debt could increase in the coming months. Thus, the short-term outlook for SNOA looks bleak.
Here is what could influence the performance of the SNOA in the coming months:
SNOA has a liability of $ 5.23 million maturing within one year and a liability of $ 4.27 million maturing beyond. On the other hand, it has $ 2.81 million in cash and $ 3.22 million in receivables within a year. Thus, its liabilities exceed the sum of its cash and receivables by $ 3.47 million, and its debt could continue to increase.
Disappointing financial data
For the fiscal first quarter ended June 30, 2021, SNOA’s revenue decreased 36% year-on-year to $ 1.50 million. The company’s gross profit fell 35.6% year-on-year to $ 1.45 million, while its net loss amounted to $ 1.10 million, from net profit of $ 240,000 for the period of the previous year. In addition, its loss per share was $ 0.52, compared to EPS of $ 0.13 in the previous year quarter.
In terms of 12-month follow-up Gross margin, SNOA’s 34.79% is 36.8% lower than the industry average of 55.01%. Likewise, its 12-month CAPEX / sales of 1.06% are 74.3% lower than the industry average of 4.14%. In addition, the stock’s last 12-month EBIT margin and EBITDA margin are negative compared to industry averages of 2.66% and 5.73%, respectively.
POWR ratings reflect grim prospects
SNOA has an overall rating of D, which equates to Selling in our POWR odds system. POWR scores are calculated taking into account 118 different factors, each factor being weighted to an optimal degree.
Our proprietary scoring system also rates each stock against eight different categories. SNOA has a D grade for quality in line with its lower profitability ratios than the industry.
The stock has a D rating for Momentum, which corresponds to its 33% loss in the past year and 35.6% decline in the past six months. Additionally, SNOA has a D rating for stability.
In addition to the POWR ratings I just outlined, we also rated SNOA for Growth, Sentiment, and Value. Click here to get all SNOA ratings.
In addition, SNOA is ranked # 155 out of 212 stocks in the Medical – Pharmaceutical industry.
The SNOA is currently trading below its 50-day and 200-day moving averages of $ 5.80 and $ 7, respectively, indicating that it is in a downtrend and may continue to lose in the near term. . So, you better avoid the stock now.
How does Sonoma (SNOA) compare to its peers?
Although the SNOA has an overall POWR rating of D, you may want to consider investing in medical and pharmaceutical stocks with an A (strong buy) rating, such as Novartis AG (NVS), Johnson & Johnson (JNJ) and Novo Nordisk A / S (NVO).
About the Author: Nimesh Jaiswal
Nimesh Jaiswal’s a passionate interest in the analysis and interpretation of financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach he takes while advising investors in his articles. Following…