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Here's Why Sonos (SONO) is an Attractive Bet for Investors
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Driven by a dynamic business model, shares of Sonos, Inc. (SONO - Free Report) have soared 216.6% compared with the industry’s growth of 41.7%. The stock currently sports a Zacks Rank #1 (Strong Buy) and has a long-term earnings growth expectation of 41.9%.
Image Source: Zacks Investment Research
This Santa Barbara, CA-based consumer electronics company delivered a trailing four-quarter earnings surprise of 297.3%, on average. The Zacks Consensus Estimate for its current-year earnings has been revised 30.6% upward over the past 30 days.
Growth Drivers
Sonos is primarily involved in the manufacturing of smart speakers with immersive sound experience. The company leverages evolving consumer technology and entertainment trends to be on par with the audio consumption patterns of customers that are largely characterized by fast-tracked adoption of voice assistants and streaming services.
Its products are distributed in more than 50 countries through third-party physical retail stores, online platform (sonos.com), and select e-commerce retailers. Catering to a varied base of developers and content partners, the company is well poised to capitalize on the potential market opportunities in the booming home audio market. With an interconnected partner network, Sonos boasts a solid footprint across the Americas, Europe, Middle East and Africa, and Asia Pacific regions.
The sound experience company remains focused on its three strategic initiatives — the expansion of its brand, the expansion of its offerings, and driving operational excellence. It invests significantly in research & development to keep itself abreast of the latest technology in hardware and software products, thereby expanding its capabilities in the global market. Technological knowhow and domain expertise, supported by the intellectual property rights of audio technologies, provide a competitive edge over its rivals.
Sonos has been actively diversifying its supply chain in Malaysia since early fiscal 2020. It is part of the company’s long-term manufacturing strategy. It also implemented several supply chain expansion initiatives to tackle the challenges posed by the pandemic while effectively addressing customer demands. Expansion of direct-to-consumer initiatives, extended partner ecosystem, continued launch of innovative products and services, and augmented geographical footprint are some of the key elements of Sonos’ growth strategy.
The company is well positioned to benefit from its proprietary software that serves as the backbone of Sonos sound system, making it different from other major players in the global market. Apart from its proprietary Sonos app and software platform, some of the primary competitive factors that act as major tailwinds are diligent customer support service, product quality and design, ease of setup and use, network technology, price and wireless capabilities. A wide customer base, significant market share, diversified product lines, and solid brand recognition reinforce its momentum for the long run. So, it is rational to believe that the stock has more upside left.
Image: Bigstock
Here's Why Sonos (SONO) is an Attractive Bet for Investors
Driven by a dynamic business model, shares of Sonos, Inc. (SONO - Free Report) have soared 216.6% compared with the industry’s growth of 41.7%. The stock currently sports a Zacks Rank #1 (Strong Buy) and has a long-term earnings growth expectation of 41.9%.
Image Source: Zacks Investment Research
This Santa Barbara, CA-based consumer electronics company delivered a trailing four-quarter earnings surprise of 297.3%, on average. The Zacks Consensus Estimate for its current-year earnings has been revised 30.6% upward over the past 30 days.
Growth Drivers
Sonos is primarily involved in the manufacturing of smart speakers with immersive sound experience. The company leverages evolving consumer technology and entertainment trends to be on par with the audio consumption patterns of customers that are largely characterized by fast-tracked adoption of voice assistants and streaming services.
Its products are distributed in more than 50 countries through third-party physical retail stores, online platform (sonos.com), and select e-commerce retailers. Catering to a varied base of developers and content partners, the company is well poised to capitalize on the potential market opportunities in the booming home audio market. With an interconnected partner network, Sonos boasts a solid footprint across the Americas, Europe, Middle East and Africa, and Asia Pacific regions.
The sound experience company remains focused on its three strategic initiatives — the expansion of its brand, the expansion of its offerings, and driving operational excellence. It invests significantly in research & development to keep itself abreast of the latest technology in hardware and software products, thereby expanding its capabilities in the global market. Technological knowhow and domain expertise, supported by the intellectual property rights of audio technologies, provide a competitive edge over its rivals.
Sonos has been actively diversifying its supply chain in Malaysia since early fiscal 2020. It is part of the company’s long-term manufacturing strategy. It also implemented several supply chain expansion initiatives to tackle the challenges posed by the pandemic while effectively addressing customer demands. Expansion of direct-to-consumer initiatives, extended partner ecosystem, continued launch of innovative products and services, and augmented geographical footprint are some of the key elements of Sonos’ growth strategy.
The company is well positioned to benefit from its proprietary software that serves as the backbone of Sonos sound system, making it different from other major players in the global market. Apart from its proprietary Sonos app and software platform, some of the primary competitive factors that act as major tailwinds are diligent customer support service, product quality and design, ease of setup and use, network technology, price and wireless capabilities. A wide customer base, significant market share, diversified product lines, and solid brand recognition reinforce its momentum for the long run. So, it is rational to believe that the stock has more upside left.
Other Top Choices
Some other top-ranked stocks in the broader industry that investors may consider are Roku, Inc. (ROKU - Free Report) , Salem Media Group, Inc. (SALM - Free Report) and Sirius XM Holdings Inc. (SIRI - Free Report) . While Roku sports a Zacks Rank #1, Salem Media and Sirius XM carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Roku delivered a trailing four-quarter earnings surprise of 506.1%, on average.
Salem Media delivered a trailing four-quarter earnings surprise of 370.2%, on average.
Sirius XM delivered a trailing four-quarter earnings surprise of 24.9%, on average.