SOPHiA GENETICS (SOPH) AI Stock Analysis

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SOPHiA GENETICS

(NASDAQ:SOPH)

Rating:51Neutral

Price Target:

$3.00

▲( 4.17% Upside)

SOPH's overall stock score reflects its mixed performance. The company has demonstrated strong revenue growth and strategic expansion, particularly in the U.S. market, which are positive indicators for future potential. However, significant challenges remain, including ongoing profitability issues, negative cash flows, and a bearish technical outlook. The valuation is unattractive due to a negative P/E ratio, and the absence of a dividend yield further limits appeal. Despite promising earnings call insights, the financial and technical weaknesses weigh down the overall score.

Positive Factors

Customer Growth

The company signed 28 new customers in the first quarter and implemented 33 new customers, which is a positive leading indicator for growth.

Market Expansion

Management believes revenue re-acceleration will continue as key growth drivers take effect, including new customer additions and US market expansion.

Negative Factors

Geographical Challenges

The company faced several headwinds in 2024 resulting in below long-term trend growth, notably from a lower biopharma revenue ramp and disruptions in LATAM.

Revenue Per Analysis

Sophia turned in a relatively challenging 2024 as they drove 4% revenue growth while growing their volumes by 11%, which implies a 6-7% decline in revenue per analysis, which declined in part due to headwinds with biopharma customers.

SOPHiA GENETICS (SOPH) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$191.14M

Dividend YieldN/A

Average Volume (3M)30.03K

Price to Earnings (P/E)―

Beta (1Y)1.31

Revenue Growth4.66%

EPS Growth11.33%

CountryUS

Employees423

SectorHealthcare

Sector Strength44

IndustryMedical - Healthcare Information Services

Share Statistics

EPS (TTM)-0.26

Shares Outstanding66,831,070

10 Day Avg. Volume20,658

30 Day Avg. Volume30,029

Financial Highlights & Ratios

PEG Ratio-0.26

Price to Book (P/B)2.20

Price to Sales (P/S)0.00

P/FCF Ratio-4.36

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$5.75

Price Target Upside99.65% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

SOPHiA GENETICS Business Overview & Revenue Model

Company DescriptionSOPHiA GENETICS SA operates as a healthcare technology company. The company offers SOPHiA DDM platform, a cloud-based software-as-a-service platform for analyzing data and generating insights from multimodal data sets and diagnostic modalities. Its SOPHiA DDM platform and related solutions, products, and services are used by hospital, laboratory, and biopharma worldwide. SOPHiA GENETICS SA was incorporated in 2011 and is headquartered in Saint-Sulpice, Switzerland.

How the Company Makes MoneySOPHiA GENETICS generates revenue primarily through its software-as-a-service (SaaS) model. The company licenses its SOPHiA DDM (Data-Driven Medicine) platform to hospitals, labs, and research institutions, charging subscription fees for access to its genomic analysis capabilities. Additional revenue streams include fees for various add-on services and data analytics solutions provided through the platform. Strategic partnerships with biotech and pharmaceutical companies also contribute to its earnings, as these collaborations often involve joint efforts in research and development, sharing of proprietary data insights, and co-marketing activities.

SOPHiA GENETICS Financial Statement Overview

Summary

SOPHiA GENETICS displays strong revenue growth in the healthcare sector, with a 31.10% increase from 2022 to 2023, but faces significant profitability challenges with sustained net losses and negative cash flows. The balance sheet highlights a concerning trend of increasing leverage and declining equity. While revenue growth is promising, the company's financial health is challenged by operational inefficiencies and cash flow issues.

Income Statement

Neutral

The company shows consistent revenue growth, with a 4.49% increase from 2023 to 2024 and a 31.10% increase from 2022 to 2023. However, the company has been posting significant net losses, with the net profit margin standing at -95.88% in 2024, indicating profitability challenges. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies.

Balance Sheet

Neutral

The balance sheet shows a decreasing trend in stockholders' equity, from $275.4 million in 2021 to $96.49 million in 2024, which is concerning. The debt-to-equity ratio has increased, suggesting rising leverage. However, the equity ratio remains relatively healthy at 62.11% in 2024, indicating that a majority of the company’s assets are financed by equity.

Cash Flow

Neutral

Free cash flow has been negative, though it improved by 11.76% from 2023 to 2024. The operating cash flow to net income ratio is negative, indicating challenges in converting sales into cash. The company also relies heavily on financing activities, evident from the positive financing cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
65.17M	62.37M	47.56M	40.45M	28.40M
	Gross Profit
43.94M	42.91M	31.25M	25.22M	17.69M
	EBIT
-66.57M	-74.83M	-87.82M	-71.49M	-37.16M
	EBITDA
-50.76M	-70.70M	-82.67M	-70.84M	-38.76M
	Net Income Common Stockholders
-62.49M	-78.98M	-87.45M	-73.67M	-39.34M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
80.23M	123.25M	178.61M	265.32M	97.34M
	Total Assets
155.31M	206.16M	243.84M	320.17M	132.12M
	Total Debt
30.03M	18.60M	16.74M	13.06M	7.25M
	Net Debt
-50.20M	-104.65M	-144.56M	-179.90M	-67.38M
	Total Liabilities
58.82M	54.71M	43.71M	44.77M	31.61M
	Stockholders Equity
96.49M	151.44M	200.13M	275.40M	100.51M
Cash Flow		Free Cash Flow
-51.00M	-57.80M	-80.47M	-64.61M	-34.93M
	Operating Cash Flow
-42.82M	-48.58M	-70.09M	-57.94M	-31.73M
	Investing Cash Flow
-8.18M	8.32M	41.97M	-56.93M	-24.32M
	Financing Cash Flow
11.59M	-2.82M	-1.57M	237.77M	107.05M

SOPHiA GENETICS Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.88

Price Trends

50DMA

3.05

Negative

100DMA

3.31

Negative

200DMA

3.43

Negative

Market Momentum

MACD

-0.03

Positive

RSI

45.87

Neutral

STOCH

17.78

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOPH, the sentiment is Negative. The current price of 2.88 is below the 20-day moving average (MA) of 3.05, below the 50-day MA of 3.05, and below the 200-day MA of 3.43, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 45.87 is Neutral, neither overbought nor oversold. The STOCH value of 17.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SOPH.

SOPHiA GENETICS Risk Analysis

SOPHiA GENETICS disclosed 85 risk factors in its most recent earnings report. SOPHiA GENETICS reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

SOPHiA GENETICS Peers Comparison

Overall Rating

UnderperformOutperform

Sector (53)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OPRX	71 Outperform	$221.02M	―	-12.90%	―	20.66%	17.97%
TXG	60 Neutral	$1.13B	―	-22.03%	―	-0.13%	42.17%
AMWL	54 Neutral	$119.36M	―	-44.04%	―	2.79%	58.22%
WGS	53 Neutral	$2.06B	38.75	-16.61%	―	48.81%	72.54%
Sector *	53 Neutral	$5.24B	3.07	-43.58%	2.80%	16.87%	-0.11%
SOPH	51 Neutral	$191.14M	―	-60.75%	―	4.66%	11.33%
EUDA		$144.35M	―		―	―	―

* Healthcare Sector Average

Performance Comparison

SOPH

SOPHiA GENETICS

2.93

-1.77

-37.66%

OPRX

OptimizeRx

11.61

-0.96

-7.64%

TXG

10x Genomics

8.32

-15.75

-65.43%

AMWL

American Well

7.44

-2.48

-25.00%

WGS

GeneDx Holdings

67.78

47.79

239.07%

EUDA

EUDA Health Holdings

3.80

1.46

62.39%

SOPHiA GENETICS Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: -8.28%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Positive

SOPHiA GENETICS demonstrated strong revenue growth and customer expansion, particularly in the U.S. market, alongside successful cost management and strategic partnerships. However, challenges in Latin America and the biopharma segment presented some headwinds.

Q1-2025 Updates

Positive Updates

Revenue Growth

Revenue grew 15% on a constant currency basis and 13% on a reported basis, reaching $17.8 million in Q1 2025 compared to $15.8 million in Q1 2024.

Increased Customer Base

SOPHiA GENETICS added 28 new customers in Q1 2025, increasing the total number of core genomic customers to 490.

U.S. Market Expansion

Revenue and analysis volume from U.S. core genomic customers grew over 30% year-over-year. Major expansions were announced at Henry Ford Hospital and Mayo Clinic.

Partnership Expansion with AstraZeneca

SOPHiA GENETICS expanded its partnership with AstraZeneca to deploy MSK-ACCES globally, extending the scope to 30 sponsored institutions.

Improved Gross Margin

Achieved a record 75.7% adjusted gross margin, up 520 basis points year-over-year.

Cost Management Success

Delivered a 24% year-over-year improvement to adjusted EBITDA loss, bringing it down to $9.8 million in Q1 2025.

Technology and Innovation

SOPHiA DDM analyzed over 2 million genomic patient profiles since inception, marking a significant milestone for the platform.

Negative Updates

Latin America Revenue Decline

Latin America experienced a slight decline in volume due to the acquisition of one of the top customers in the region by another lab.

Challenge with Biopharma

Biopharma presented some modest headwinds, with expectations of flat growth in 2025.

Revenue Churn

While 33 new customers were added, some smaller accounts that had not generated revenue over the past 12 months were churned out, maintaining a revenue churn rate of approximately 4%.

Company Guidance

During the SOPHiA GENETICS Q1 2025 earnings call, the company provided guidance that reflects promising growth and strategic advancements. Revenue increased by 15% on a constant currency basis and 13% on a reported basis, highlighting a return to near historical growth levels, with a specific focus on capitalizing on new customer signings and expanding in the U.S. market, where revenue from core genomic customers grew over 30% year-over-year. The company added 28 new customers in Q1 2025, contributing to an increase in platform analysis volume to approximately 93,000, representing an 11% year-over-year growth. SOPHiA GENETICS also achieved a record adjusted gross margin of 75.7%, up 520 basis points year-over-year, and delivered a 24% year-over-year improvement in adjusted EBITDA loss, which stood at $9.8 million for the quarter. The company reaffirmed its full-year revenue guidance for 2025 of $72 million to $76 million, representing 10% to 17% growth on a reported basis, and is optimistic about its path towards adjusted EBITDA breakeven by the end of 2026.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.