Financial Analysis: Novartis (NYSE:NVS) and Sonnet BioTherapeutics (NASDAQ:SONN)

Novartis (NYSE:NVS) and Sonnet BioTherapeutics (NASDAQ:SONN) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Institutional and Insider Ownership

13.1% of Novartis shares are held by institutional investors. Comparatively, 9.4% of Sonnet BioTherapeutics shares are held by institutional investors. 0.0% of Novartis shares are held by insiders. Comparatively, 2.0% of Sonnet BioTherapeutics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Novartis and Sonnet BioTherapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Novartis	23.56%	37.24%	15.85%
Sonnet BioTherapeutics	N/A	-408.93%	-174.13%

Risk and Volatility

Novartis has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Sonnet BioTherapeutics has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Novartis and Sonnet BioTherapeutics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novartis	3	6	1	0	1.80
Sonnet BioTherapeutics	0	0	1	0	3.00

Novartis currently has a consensus price target of $123.38, indicating a potential upside of 13.03%. Sonnet BioTherapeutics has a consensus price target of $20.00, indicating a potential upside of 1,365.31%. Given Sonnet BioTherapeutics’ stronger consensus rating and higher probable upside, analysts plainly believe Sonnet BioTherapeutics is more favorable than Novartis.

Earnings & Valuation

This table compares Novartis and Sonnet BioTherapeutics”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novartis	$51.72 billion	4.31	$11.94 billion	$5.88	18.56
Sonnet BioTherapeutics	$1.00 million	4.18	-$7.44 million	N/A	N/A

Novartis has higher revenue and earnings than Sonnet BioTherapeutics.

Summary

Novartis beats Sonnet BioTherapeutics on 8 of the 11 factors compared between the two stocks.

About Novartis

Novartis AG engages in the research, development, manufacture, and marketing of healthcare products in Switzerland and internationally. The company offers prescription medicines for patients and physicians. It focuses on therapeutic areas, such as cardiovascular, renal and metabolic, immunology, neuroscience, and oncology, as well as ophthalmology and hematology. Novartis AG has a license and collaboration agreement with Alnylam Pharmaceuticals to develop, manufacture, and commercialize inclisiran, a therapy to reduce LDL cholesterol; and Dawn Health for the development and commercialization of Ekiva, a digital solution designed for people living with Paroxysmal Nocturnal Hemoglobinuria. The company was incorporated in 1996 and is headquartered in Basel, Switzerland.

About Sonnet BioTherapeutics

Sonnet BioTherapeutics Holdings, Inc., a biotechnology company, owns a platform for biologic medicines of single or bifunctional action. The company develops fully human albumin binding technology, which utilizes human single chain antibodies fragment that binds to and hitch-hikes on human serum albumin for transport to target tissues. Its lead product candidate is SON-1010, a fully human single-chain version of interleukin 12 that is in Phase 1b/2a clinical trial for the treatment of solid tumor indications, including ovarian cancer, non-small cell lung cancer, and head and neck cancer. The company is also developing SON-080, a fully human version of interleukin 6, which is in Phase 1b/I2a clinical trail to treat chemotherapy-induced peripheral neuropathy and diabetic peripheral neuropathy; and SON-1210, a bispecific compound for solid tumor indications, including colorectal cancer. It has a license agreement with New Life Therapeutics Pte, LTD. to develop and commercialize pharmaceutical preparations containing a specific recombinant human interleukin-6; and strategic development collaboration with Sarcoma Oncology Center to advance SON-1210. The company is headquartered in Princeton, New Jersey.