Sol-Gel Technologies (NasdaqCM:SLGL) opened 2026 with Q1 revenue of US$0.1 million and a basic EPS loss of US$1.31, while net income excluding extra items was a loss of US$3.7 million. Over the past five reported quarters, the company has seen revenue move between US$0.1 million and US$17.3 million, with basic EPS ranging from a loss of US$3.16 to a gain of US$4.17 per share and trailing 12 month EPS sitting at a loss of US$0.37. For investors, this quarter focuses on how a small top line and ongoing losses influence the effort to achieve healthier margins.

See our full analysis for Sol-Gel Technologies.

With the headline numbers on the table, the next step is to see how they line up against the prevailing narratives around Sol-Gel Technologies, and where the latest results challenge those expectations.

Trailing 12 Months Show Smaller Losses

• Over the last 12 months, Sol-Gel reported total revenue of US$18.5 million and a net loss of US$1.0 million, with trailing EPS at a loss of US$0.37.
• What stands out is that earnings have improved over time, with losses reduced by an average of 7.6% per year over five years. However, the company still reports a loss in Q1 2026 of US$3.7 million, which keeps the focus on how durable this improvement really is.
  • The latest trailing 12 month net loss of US$1.0 million compares with a quarterly loss of US$3.7 million in Q1 2026, so investors are looking at a period where the annual picture appears softer than the most recent quarter.
  • With trailing revenue of US$18.5 million against that loss, the data supports the idea of progress in reducing losses, but it also shows the business has not yet reached profitability.

Curious how other investors are interpreting this mix of smaller trailing losses and fresh quarterly weakness for Sol-Gel Technologies? 📊 Read the what the Community is saying about Sol-Gel Technologies.

Lumpy Revenue After US$17.3 Million Spike

• Quarterly revenue has swung from US$17.3 million in Q2 2025 to between US$0.1 million and US$1.0 million in the other reported quarters, including US$0.1 million in Q1 2026.
• Critics highlight that forecasts in the data show no revenue expected next year and continued unprofitability over the next three years, and the pattern of one large US$17.3 million quarter followed by much smaller quarters feeds that cautious view.
  • The sharp contrast between US$17.3 million in Q2 2025 and US$0.1 million in Q1 2026 means a big portion of the recent 12 month revenue of US$18.5 million came from a single quarter.
  • With Q1 2026 net income at a loss of US$3.7 million against that very small top line, the data lines up with the bearish concern that earnings remain heavily dependent on sporadic revenue rather than a steady base.

Rich Valuation Against Ongoing Losses

• The stock trades at US$75.28 with a P/S of 13.3x versus 3.2x for peers and 5.8x for the US Pharmaceuticals industry, and the DCF fair value is US$1.48.
• Bears argue that paying 13.3x sales and a price far above the US$1.48 DCF fair value is hard to justify while Sol-Gel is still loss making on both a quarterly and trailing 12 month basis.
  • Over the last 12 months, Sol-Gel recorded a net loss of US$1.0 million and Q1 2026 EPS was a loss of US$1.31, which directly contrasts with the high P/S multiple.
  • Recent shareholder dilution and share price volatility over the past three months add more weight to bearish concerns about paying such a premium for a company that is not yet profitable.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Sol-Gel Technologies's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Given this mix of pressure points and potential bright spots, it makes sense to review the numbers yourself and decide where you stand. Before you move on, take a moment to weigh both the red flags and the upside case by checking out the 1 key reward and 3 important warning signs

See What Else Is Out There

Sol-Gel Technologies currently combines lumpy revenue, ongoing losses and a high P/S multiple, which raises questions about paying a premium for uncertain earnings quality.

If you are concerned about paying up for a stock with thin revenue and no profits yet, consider shifting your research toward companies screened as 46 high quality undervalued stocks to see if their prices line up more closely with their fundamentals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.