Fourth quarter 2025 guidance puts revenue expectations in focus

Soleno Therapeutics (SLNO) has put out preliminary unaudited revenue guidance for the fourth quarter of 2025, expecting net revenue between US$90 million and US$92 million, providing a fresh reference point for investors tracking the stock.

At a share price of US$43.56, Soleno Therapeutics has seen a 31.57% 3 month share price decline and an 11.79% 1 month share price decline, yet its 3 year total shareholder return remains very large, suggesting long term holders have still seen substantial gains even as recent momentum has softened around the latest revenue guidance.

If this kind of guidance driven move has you looking across healthcare, it could be a good time to scan other healthcare stocks for potential ideas beyond Soleno.

With the share price down over the past year but still reflecting a very large 3-year total return, and with new revenue guidance on the table, is Soleno undervalued today, or is the market already pricing in future growth?

Price-to-Sales of 23.7x: Is it justified?

At the last close of US$43.56, Soleno Therapeutics trades on a P/S ratio of 23.7x, which screens as expensive relative to both peers and its sector.

The P/S ratio compares a company’s market value to its revenue, so a higher multiple usually reflects strong expectations for future sales growth or profitability improvements. For a clinical stage biotech that is still loss making, a high P/S often signals that investors are putting significant weight on future pipeline success rather than current financial results.

Here, the market is assigning a P/S of 23.7x compared with a peer average of 17.4x and a US Biotechs industry average of 11.4x, indicating a clear premium. Against an estimated fair P/S ratio of 19.7x, the current level also sits above the regression based fair value marker. This could be a reference point some investors watch if sentiment or growth expectations change.

Result: Price-to-Sales of 23.7x (OVERVALUED)

However, you also need to watch for clinical or regulatory setbacks around Diazoxide Choline and for any weaker than expected revenue compared with the US$90 million to US$92 million guidance.

Another view: DCF points in a very different direction

While the 23.7x P/S ratio flags Soleno as expensive by peer and industry standards, our DCF model points the other way. It suggests the shares are trading about 90.2% below an estimated future cash flow value of roughly US$445.10, which screens as very undervalued using that approach.

That kind of gap highlights how sensitive Soleno’s story is to assumptions about future cash generation from Diazoxide Choline and rare disease pricing. The real question for you is which set of expectations you find more realistic: the rich P/S today or the optimistic DCF.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Soleno Therapeutics for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 876 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Soleno Therapeutics Narrative

If you see the numbers differently, or prefer to rely on your own work, you can build a complete view in just a few minutes with Do it your way

A great starting point for your Soleno Therapeutics research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If Soleno has your attention, do not stop there. Casting a wider net across other ideas can help you spot opportunities you might otherwise miss.

• Hunt for potential value by checking out these 876 undervalued stocks based on cash flows, where cash flow based opportunities are already filtered for you.
• Spot early trends in artificial intelligence by reviewing these 23 AI penny stocks that are tied to real businesses rather than hype.
• Tap into income focused ideas by scanning these 13 dividend stocks with yields > 3%, so you are not relying on just one company for potential yield.

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.