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Sonos (SONO) Outpaces Stock Market Gains: What You Should Know

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Sonos (SONO - Free Report) closed the most recent trading day at $32.21, moving +1.8% from the previous trading session. This change outpaced the S&P 500's 1.71% gain on the day.

Heading into today, shares of the maker of wireless speakers and home sound systems had lost 13.83% over the past month, lagging the Consumer Discretionary sector's loss of 4.84% and the S&P 500's loss of 2.25% in that time.

SONO will be looking to display strength as it nears its next earnings release. On that day, SONO is projected to report earnings of -$0.07 per share, which would represent a year-over-year decline of 146.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $351.56 million, up 3.45% from the year-ago period.

Investors might also notice recent changes to analyst estimates for SONO. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. SONO currently has a Zacks Rank of #3 (Hold).

Digging into valuation, SONO currently has a Forward P/E ratio of 27.04. For comparison, its industry has an average Forward P/E of 13.25, which means SONO is trading at a premium to the group.

Meanwhile, SONO's PEG ratio is currently 0.65. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Audio Video Production was holding an average PEG ratio of 1.13 at yesterday's closing price.

The Audio Video Production industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 47, putting it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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