Sonoma Pharmaceuticals shares plummet on disappointing earnings

Sonoma Pharmaceuticals, which develops treatments for dermatological conditions and advanced wound care with its flagship product stabilized hypochlorous acid, saw its stock plunge almost 20% on Friday, August 9. The losses followed the release of worse than expected quarterly financial results.

Details

Sonoma stock fell 19.7% on Friday to $0.25 per share. Though it is up nearly 38.0% for the year to date, over the last 12 months Sonoma is still down 75.7%.

On Thursday, the company released its results for the first quarter of the 2025 fiscal year, which ended on June 30. Revenue came in flat year-over-year at $3.4 million. The bottom line saw a net loss, with the loss per share, as calculated by the financial analysis platform Simply Wall St, at $0.067, versus $0.29 a year earlier. The results overall missed analyst expectations, with revenue 10% below the consensus forecast and the loss per share 40% worse than expected, according to Simply Wall St.

What Sonoma does

Sonoma develops and produces products based on stabilized hypochlorous acid for wound care, animal health care, eye and nasal care, oral care, and dermatological conditions. They are used to treat diabetic foot ulcers and pressure sores, and include a scar gel, eyelid cleansers, hydrogels for sunburn, and more. Some products are available only by prescription, while others can be purchased over the counter.

In the fiscal-2025 first quarter, revenue grew 20% year-over-year in Europe but declined in Asia and other regions. Sonoma noted that these figures tend to be volatile when viewed on a quarterly basis due to customers placing larger but less frequent orders to benefit from quantity discounts and reduced shipping costs.

For the fiscal-2024 full year (ended March 31), Sonoma also reported revenue growth in Europe and a decline in the U.S. The company attributed the latter to fluctuations in sales of animal care products, while the European pickup was to have been driven partly by higher demand for wound treatment in Poland “due to recent world events.”

Analyst insights

According to MarketWatch, one analyst follows Sonoma Pharmaceuticals. The stock is rated a buy, with a target price of $1.30 per share — five times the closing price as of August 9.