Critical Analysis: Echo Therapeutics (ECTE) vs. Soleno Therapeutics (SLNO)

Echo Therapeutics (OTCMKTS: ECTE) and Soleno Therapeutics (NASDAQ:SLNO) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Profitability

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This table compares Echo Therapeutics and Soleno Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Echo Therapeutics	N/A	N/A	N/A
Soleno Therapeutics	N/A	-54.36%	-40.91%

Earnings and Valuation

This table compares Echo Therapeutics and Soleno Therapeutics’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Echo Therapeutics	N/A	N/A	-$22.19 million	N/A	N/A
Soleno Therapeutics	$1.45 million	38.04	-$15.66 million	($1.35)	-2.07

Soleno Therapeutics has higher revenue and earnings than Echo Therapeutics.

Risk and Volatility

Echo Therapeutics has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, Soleno Therapeutics has a beta of 5.11, meaning that its stock price is 411% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Echo Therapeutics and Soleno Therapeutics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Echo Therapeutics	0	0	0	0	N/A
Soleno Therapeutics	0	0	3	0	3.00

Soleno Therapeutics has a consensus price target of $7.33, indicating a potential upside of 162.84%. Given Soleno Therapeutics’ higher probable upside, analysts plainly believe Soleno Therapeutics is more favorable than Echo Therapeutics.

Insider & Institutional Ownership

45.8% of Soleno Therapeutics shares are owned by institutional investors. 7.0% of Echo Therapeutics shares are owned by company insiders. Comparatively, 43.3% of Soleno Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Soleno Therapeutics beats Echo Therapeutics on 7 of the 9 factors compared between the two stocks.

About Echo Therapeutics

Echo Therapeutics, Inc. engages in the development of transdermal skin permeation and diagnostic medical devices for wearable-health consumer and diabetes outpatient markets. It is developing continuous glucose monitoring (CGM) system, a needle-free wireless continuous glucose monitoring system in a hospital setting in the European Union. The company has a licensing agreement with Ferndale Pharma Group, Inc. to develop, manufacture, distribute, and market devices for skin preparation prior to the application of topical anesthetics or analgesics prior to a range of needle-based medical procedures in North America, the United Kingdom, South America, Australia, New Zealand, Switzerland, and other portions of the European Community. In addition, it has a license agreement with Handok Pharmaceuticals Co., Ltd. to develop, use, market, import, and sell CGM to medical facilities and individual consumers in South Korea; and a license, development, and commercialization agreement with Medical Technologies Innovation Asia, Ltd to research, develop, manufacture, and use CGM in the People's Republic of China, Hong Kong, Macau, and Taiwan. The company was founded in 1989 and is headquartered in Iselin, New Jersey.

About Soleno Therapeutics

Soleno Therapeutics, Inc. focuses on the development and commercialization of novel therapeutics for the treatment of rare diseases. Its lead candidate, diazoxide choline controlled-release (DCCR), a tablet for the treatment of Prader-Willi Syndrome (PWS), is entering into late-stage clinical development. The company was formerly known as Capnia, Inc. and changed its name to Soleno Therapeutics, Inc. in May 2017. Soleno Therapeutics, Inc. was founded in 1999 and is based in Redwood City, California.