Contrasting Spectral AI (NASDAQ:MDAI) & Sonoma Pharmaceuticals (NASDAQ:SNOA)

Sonoma Pharmaceuticals (NASDAQ:SNOA) and Spectral AI (NASDAQ:MDAI) are both small-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Sonoma Pharmaceuticals and Spectral AI, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonoma Pharmaceuticals	0	0	0	0	0.00
Spectral AI	0	0	3	1	3.25

Spectral AI has a consensus target price of $4.50, indicating a potential upside of 129.59%. Given Spectral AI’s stronger consensus rating and higher probable upside, analysts clearly believe Spectral AI is more favorable than Sonoma Pharmaceuticals.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sonoma Pharmaceuticals	-27.21%	-59.58%	-24.33%
Spectral AI	-40.78%	N/A	-77.87%

Insider and Institutional Ownership

2.0% of Sonoma Pharmaceuticals shares are owned by institutional investors. Comparatively, 67.1% of Spectral AI shares are owned by institutional investors. 3.9% of Sonoma Pharmaceuticals shares are owned by company insiders. Comparatively, 56.7% of Spectral AI shares are owned by company 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.

Valuation and Earnings

This table compares Sonoma Pharmaceuticals and Spectral AI”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sonoma Pharmaceuticals	$13.55 million	0.26	-$4.84 million	($4.99)	-0.53
Spectral AI	$18.06 million	2.02	-$20.85 million	($0.65)	-3.02

Sonoma Pharmaceuticals has higher earnings, but lower revenue than Spectral AI. Spectral AI 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 & Risk

Sonoma Pharmaceuticals has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, Spectral AI has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Summary

Spectral AI beats Sonoma Pharmaceuticals on 10 of the 15 factors compared between the two stocks.

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 Spectral AI

Spectral AI, Inc., an artificial intelligence (AI) company, focuses on developing predictive medical diagnostics in the United States. The company develops medical diagnostics for faster and accurate treatment decisions in wound care with applications involving patients with burns and diabetic foot ulcers. Its products include DeepView System, a predictive analytics platform integrated with the predictive AI-Burn, which combines AI algorithms and multispectral imaging (MSI) imaging for an assessment of wound healing potential and offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention; and DeepView SnapShot M, a handheld, portable, and wireless diagnostic tool, that provides a potential enhanced and expanded use for the government and emergency care, first responders, and potentially home health care professionals. The company is headquartered in Dallas, Texas.