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Sonos (SONO - Free Report) is a higher-end home audio company that competes against the likes of Bose. SONO shares have soared in the past year and its outlook appears strong as it continues to expand and diversify its portfolio.
Good Vibrations
Sonos is one of the preeminent home audio companies that specializes in wireless and multi-room sound systems. Its speakers and sound systems are often compared to Bose in terms of quality and price. The company’s speakers are not what many would consider cheap, but they are rather affordable considering the quality and important role they play in many people’s lives and homes.
Sonos’ baseline smart speaker starts at $179. The company then sells a range of sleek, connected speakers that come in black and white. Users can connect streaming music services to their Sonos speakers, and some of the models are voice-controlled, with Amazon Alexa and The Google Assistant built in.
The company also makes subwoofers, soundbars for TVs, and more, enabling people to build on their home audio collections, if they want, and connect the speakers for music or anything else throughout the living space. Sonos sells its speakers individually and in packages, such as surround sound sets that can cost up to $1,900.
The speaker firm’s quality and functionality has helped it thrive in a crowded market that includes tech titans like Apple (AAPL - Free Report) . And SONO offers what it calls architectural speakers and sound systems that can be placed in walls and ceilings.
Growing Louder
Most recently, Sonos on March 9 announced its lower-priced entry into the widely popular portable smart speaker market. The WiFi and Bluetooth-enabled Roam costs $169 and is now the firm’s more mass appeal speaker.
Aside from speakers, Sonos back in November rolled out its new ad-free, HD streaming tier of its radio service. Sonos Radio HD costs $7.99 a month and aims to compete again Spotify (SPOT - Free Report) , Apple Music, Amazon Music Unlimited (AMZN - Free Report) , and others.
The nearby chart showcases SONO’s early struggles after its 2018 IPO. But Wall Street tuned into Sonos and its growth story over the last year, helping send the stock up 370%, from under $10 a share to over $40. This run includes an 80% climb in 2021. At around $41.50 a share, SONO trades about 7% below its mid-April records.
Despite the speaker company’s massive run over the past year, outpacing Peloton (PTON - Free Report) , Shopify (SHOP - Free Report) , Etsy (ETSY - Free Report) , and countless other high-flyers, SONO sits just above neutral RSI levels (50) at 53. This could give it plenty of more runway. And at 2.9X forward 12-month sales, SONO trades around 10% below its own year-long highs and is just above the Zacks Consumer Discretionary Sector’s 2.8X, which is solid considering its huge run.
Recent Performance and Outlook
Sonos topped our Q1 FY21 estimates on February 10. The firm’s revenue climbed 15% for the second quarter in a row, and its Free cash flow jumped 97% to $203 million in the first quarter. Plus, it added a record number of new customers and saw a record number of existing customers add to their Sonos product collections.
Sonos and its “industry-leading gross margins” jumped nearly 6% to 46.4% last quarter. And the company is actively improving its direct-to-consumer business, which could prove vital in the e-commerce age.
Zacks estimates call for Sonos Q2 revenue to surge 44% from an easier-to-compare period last year to come in at $251.5 million. This positivity is projected to help it cut its adjusted loss form -$0.48 to -$0.22 a share. Peeking further down the road, its full-year fiscal 2021 sales are projected to climb 18% to $1.6 billion, with FY22 projected to come in 10.4% higher.
These would top FY20’s 5% sales growth and compare well against 2019’s 11% expansion. Wall Street is also likely pleased to see that SONO is expected to skyrocket from an adjusted loss of -$0.18 a share to +$0.78 this year, with FY22 set to climb another 21% .
Bottom Line
SONO’s positive earnings revisions help it grab a Zacks Rank #1 (Strong Buy) at the moment, alongside its “A” grade for Growth in our Style Scores system. The company’s Audio Video Production industry also ranks in the top 21% of our over 250 Zacks industries.
On top of all of that, Sonos in November announced a $50 million share repurchase program, after it completed its previous round of buybacks. Given all the upbeat tunes, investors might want to consider Sonos, especially as millennials ramp up home buying and pent-up demand creates a spending boom.
Sonos is set to release its second quarter fiscal 2021 financial results on Wednesday, May 12.
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Bull of the Day: Sonos, Inc. (SONO)
Sonos (SONO - Free Report) is a higher-end home audio company that competes against the likes of Bose. SONO shares have soared in the past year and its outlook appears strong as it continues to expand and diversify its portfolio.
Good Vibrations
Sonos is one of the preeminent home audio companies that specializes in wireless and multi-room sound systems. Its speakers and sound systems are often compared to Bose in terms of quality and price. The company’s speakers are not what many would consider cheap, but they are rather affordable considering the quality and important role they play in many people’s lives and homes.
Sonos’ baseline smart speaker starts at $179. The company then sells a range of sleek, connected speakers that come in black and white. Users can connect streaming music services to their Sonos speakers, and some of the models are voice-controlled, with Amazon Alexa and The Google Assistant built in.
The company also makes subwoofers, soundbars for TVs, and more, enabling people to build on their home audio collections, if they want, and connect the speakers for music or anything else throughout the living space. Sonos sells its speakers individually and in packages, such as surround sound sets that can cost up to $1,900.
The speaker firm’s quality and functionality has helped it thrive in a crowded market that includes tech titans like Apple (AAPL - Free Report) . And SONO offers what it calls architectural speakers and sound systems that can be placed in walls and ceilings.
Growing Louder
Most recently, Sonos on March 9 announced its lower-priced entry into the widely popular portable smart speaker market. The WiFi and Bluetooth-enabled Roam costs $169 and is now the firm’s more mass appeal speaker.
Aside from speakers, Sonos back in November rolled out its new ad-free, HD streaming tier of its radio service. Sonos Radio HD costs $7.99 a month and aims to compete again Spotify (SPOT - Free Report) , Apple Music, Amazon Music Unlimited (AMZN - Free Report) , and others.
The nearby chart showcases SONO’s early struggles after its 2018 IPO. But Wall Street tuned into Sonos and its growth story over the last year, helping send the stock up 370%, from under $10 a share to over $40. This run includes an 80% climb in 2021. At around $41.50 a share, SONO trades about 7% below its mid-April records.
Despite the speaker company’s massive run over the past year, outpacing Peloton (PTON - Free Report) , Shopify (SHOP - Free Report) , Etsy (ETSY - Free Report) , and countless other high-flyers, SONO sits just above neutral RSI levels (50) at 53. This could give it plenty of more runway. And at 2.9X forward 12-month sales, SONO trades around 10% below its own year-long highs and is just above the Zacks Consumer Discretionary Sector’s 2.8X, which is solid considering its huge run.
Recent Performance and Outlook
Sonos topped our Q1 FY21 estimates on February 10. The firm’s revenue climbed 15% for the second quarter in a row, and its Free cash flow jumped 97% to $203 million in the first quarter. Plus, it added a record number of new customers and saw a record number of existing customers add to their Sonos product collections.
Sonos and its “industry-leading gross margins” jumped nearly 6% to 46.4% last quarter. And the company is actively improving its direct-to-consumer business, which could prove vital in the e-commerce age.
Zacks estimates call for Sonos Q2 revenue to surge 44% from an easier-to-compare period last year to come in at $251.5 million. This positivity is projected to help it cut its adjusted loss form -$0.48 to -$0.22 a share. Peeking further down the road, its full-year fiscal 2021 sales are projected to climb 18% to $1.6 billion, with FY22 projected to come in 10.4% higher.
These would top FY20’s 5% sales growth and compare well against 2019’s 11% expansion. Wall Street is also likely pleased to see that SONO is expected to skyrocket from an adjusted loss of -$0.18 a share to +$0.78 this year, with FY22 set to climb another 21% .
Bottom Line
SONO’s positive earnings revisions help it grab a Zacks Rank #1 (Strong Buy) at the moment, alongside its “A” grade for Growth in our Style Scores system. The company’s Audio Video Production industry also ranks in the top 21% of our over 250 Zacks industries.
On top of all of that, Sonos in November announced a $50 million share repurchase program, after it completed its previous round of buybacks. Given all the upbeat tunes, investors might want to consider Sonos, especially as millennials ramp up home buying and pent-up demand creates a spending boom.
Sonos is set to release its second quarter fiscal 2021 financial results on Wednesday, May 12.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
AccessZacks Top 10 Stocks for 2021 today >>