| 2021 | 2022 | 2023 | 2025 (projected) | Other Operating Expenses | 30.0M | 18.9M | 11.9M | 4.5M | Total Revenue | 349.9K | 147.8K | 18.6K | 42.6M |
Is it time to hedge Sonnet Biotherapeutics (USA Stocks:SONN) high volatility
 | By Aina Ster | Macroaxis Story |
Sonnet BioTherapeutics' shares experienced a notable drop of over 5% despite a broader market rally, highlighting its inherent volatility. The stock's recent decline comes amid mixed signals from technical indicators, such as a negative period momentum of -0.23 and a daily balance of power at -0.07, suggesting some underlying selling pressure. While the company has a strong analyst consensus with a "Strong Buy" rating and a potential upside of around 35, the current valuation remains modest at roughly $7.76 billion, with a target price estimated at $20. However, the stock's recent price action and a valuation hype value of approximately $3.81 indicate cautious investor sentiment. This combination of factors points to a stock that can swing sharply, making it a riskier choice for those seeking stability but potentially rewarding for traders willing to navigate its volatility. Compared to most stocks, Sonnet Biotherapeutics Holdings carries higher risk, and many traded equities are expected to deliver better returns over the next 60 days. While some investors are growing cautious about the biotech sector, Sonnet remains a potential alternative worth considering. We’ll examine the chances of Sonnet achieving above-average gains in the coming weeks. Recent risk factors could influence the stock’s price, but our analysis suggests that Sonnet is currently undervalued, with a true value nearing $7.76 per share.
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Reviewed by Gabriel Shpitalnik
Sonnet Biotherapeutics shares experienced a more than 5% drop, highlighting increased short-term volatility despite the broader market rally. The stock's high kurtosis of 63.76 and skewness of 7.92 suggest a risk of sudden, sharp price swings that traders should watch closely.
Major Takeaways
Sonnet Biotherapeutics Holdings has liabilities totaling approximately $130.86K and a debt-to-equity ratio of 0.36, which is fairly typical among its peers. Its current ratio stands at 1.08, indicating it might face challenges in meeting short-term obligations if financial conditions tighten. When evaluating its debt, it's important to consider cash reserves and equity to get a complete picture. The company scores a 9 out of 100 on performance metrics, suggesting limited growth prospects. With a beta of 0.3, Sonnet tends to move less than the overall market, meaning it could offer some stability during downturns but may underperform during bullish periods. For a deeper understanding of potential risks and returns, review its value at risk and analyze the relationship between skewness and the day median price.Volatility is a rate at which the price of Sonnet Biotherapeutics or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Sonnet Biotherapeutics may increase or decrease. In other words, similar to Sonnet's beta indicator, it measures the risk of Sonnet Biotherapeutics and helps estimate the fluctuations that may happen in a short period of time. So if prices of Sonnet Biotherapeutics fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.How important is Sonnet Biotherapeutics's Liquidity
Sonnet Biotherapeutics financial leverage refers to using borrowed capital as a funding source to finance Sonnet Biotherapeutics Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Sonnet Biotherapeutics financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Sonnet Biotherapeutics' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Sonnet Biotherapeutics' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Sonnet Biotherapeutics's total debt and its cash.
Sonnet Biotherapeutics Gross Profit
Sonnet Biotherapeutics Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Sonnet Biotherapeutics previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Sonnet Biotherapeutics Gross Profit growth over the last 10 years. Please check Sonnet Biotherapeutics' gross profit and other fundamental indicators for more details.
Sonnet Biotherapeutics Volatility Drivers
Sonnet Biotherapeutics unsystematic risk is unique to Sonnet Biotherapeutics and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Sonnet Biotherapeutics you can also buy Hoth Therapeutics. You can also mitigate this risk by investing in the health care sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Sonnet Biotherapeutics important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Sonnet Biotherapeutics income statement and balance sheet. Here are more details about Sonnet volatility.Click cells to compare fundamentals
Breaking it down a bit more
Sonnet Biotherapeutics reported the previous year's revenue of 18.63 K. Net Loss for the year was (7.44 M) with loss before overhead, payroll, taxes, and interest of (69.01 K).
A rising tide lifts all boats, but sometimes even strong currents can't prevent individual stocks from sinking.Sonnet Biotherapeutics Holdings shares dropped over 5% despite a broader market rally, highlighting the stock's inherent volatility. The company's beta of 0.94 suggests it moves closely with the market, yet its high coefficient of variation at 830.07 indicates significant risk relative to its returns. With a potential upside of 8.76 and a maximum drawdown of 17.77, traders should approach Sonnet with caution, especially given its 96% probability of bankruptcy and relatively low institutional ownership of 5.24%. While the biotech firm’s innovative platform offers promise, its current risk profile underscores the importance of careful risk management..
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