|Bid||11.160 x 1800|
|Ask||11.170 x 800|
|Day's Range||11.03 - 11.21|
|52 Week Range||9.23 - 23.60|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||44.17|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||15.60|
Audio tech maker Sonos, Inc. (NASDAQ:SONO) is having a hard time reversing the strong downtrend in its stock price. And if the CFO retirement and the second-quarter warning weigh any more on its stock, its market capitalization may fall below the $1 billion level. Despite the premium speaker supplier differentiating itself from other brands, cheaper smart speakers from Alphabet (NASDAQ:GOOGL) or Amazon.com (NASDAQ:AMZN) might prolong the glut of Sonos speakers on the market. Investors are looking for bullish reasons to hold SONO stock?Sonos continues to develop consumer interest in its brand. First quarter results showed it can drive sustainable, profitable growth. Revenue grew 6% over last year to $496 million while EBITDA came in at $87 million, up 34%. It now has eight million homes using the speaker product. Each share of SONO stock earned 55 cents diluted, up from 26 cents last year.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe balance sheet is healthy because the firm ended the quarter with $307.4 million in cash, compared to $31.4 billion in long-term debt. * Buy These 5 Stocks to Play the Megatrend of the Century New product launches helped drive revenue in the period. It recently launched Sonos Beam, lifting home theater revenue by 42% Y/Y. With that strong initial pace, investors should expect this segment of the market lifting overall results for the full year. Unfortunately, European consumers haven't yet embraced voice assistant products, with the smart speaker still in its infancy but management it's only a matter of time. Sonos also restrained itself from spending more on sales and marketing. But with a bigger ad budget for the region, Q2 results may not come in as weak as management guided. Disappointing ForecastsA reduced sell-through in Q1 raised Sonos' channel inventory enough to cause management to warn on Q2 results. A delayed production schedule with IKEA, pushed into Q3 instead of Q2, is putting pressure on EBITDA growth for the full year. Sonos forecasts revenue growing 10-12% and in the range of $1.25 billion-$1.275 billion. Adjusted EBITDA growth will be in the range of 20-27%.Investors turned sour on SONO stock because the seasonal Q1 strength, helped by the holiday period, follows with a typically slower period. Then, add in the uncertainties for European customers not yet ready to buy a Sonos product, the retirement of CFO Michael Giannetto, and the revised IKEA product launch. It might seem as if these issues appear temporary but management did not rule out a slowdown in some channels in the U.S. continuing into the current second quarter. New Product IntrosIn addition to the new products introduced last quarter, Sonos could add more speakers and headphones to its product catalog to drive slowing sales. Management has a less risky plan. On the quarterly conference call, they said it could apply its expertise in wireless by further developing cloud connectivity and services. If it were to enter new markets like earphones, it would have to bring some feature that differentiated SONO from the competition. * 10 Best Dividend Stocks to Buy for the Next 10 Months Shareholders should welcome this approach. Too often, companies run with new product introductions only to end up with higher costs and with products that are low margin because they do not add anything new to the mix. Fitbit (NYSE:FIT) and GoPro (NASDAQ:GPRO) are just two examples. Fitbit is now competing with smartwatches while GoPro's video camera competes with the smartphone video capture and video cameras themselves. Valuation on SONO Stock is ToughThere's thin coverage on Wall Street on Sonos stock. The four analysts watching SONO have a $16.50 average price target (links to Tipranks), implying more than 50% upside. Realistically, arriving at a fair value on Sonos' value is tricky because the company has not been a public company for very long. Its revenue potential is difficult to forecast because the company is still in a growth phase.Newly listed stocks are inherently risky and Sonos is no exception. If you try out its product you will know how much better the sound quality is over competitors. Plus, the company does not overcharge for its product. As an investment, though, Sonos stock is still a "show me" play. Fortunately, management is not panicking over the near-term inventory issues and slowing demand. It has the right attitude of delivering a superior product that stands out over the competition. And it is embracing home assistance on the speaker and a quality sound experience. That is a winning attitude that could pay off for Sonos investors.Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 U.S. Stocks That Are Coming to Life Again * The 7 Best Video Game Stocks to Power Up Your Portfolio! * 5 Tips to Become a Better Stock Trader Compare Brokers The post Why Buying Sonos After the Dip Is Not a Leap of Faith By Any Measure appeared first on InvestorPlace.
Hardware stocks historically haven't fared well, so in some way Sonos' stock is grouped together with other companies that "haven't persevered over the long term," Spence said during a Monday interview on "Bloomberg Technology." This would partly explain the stock's double-digit percentage sell-off following its Q1 print, and the stock's 26-percent decline since its initial public offering last year. In terms of competition, Sonos isn't up against smart speakers made by the likes of Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and Apple Inc. (NASDAQ: AAPL), the executive said.
A stock market rebound and interest in the company's product pipeline helped the home audio specialist post double-digit gains last month.
Few sectors on Wall Street are as out of favor these days as consumer electronics stocks. The steep declines of Arlo Technologies and Sonos are notable examples of the industry's trend.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card! Today we'll evaluate Sonos, Inc. (NASDAQ:SONO) toRead More...
Shares of Sonos (NASDAQ:SONO) dropped sharply after the wireless and home speaker manufacturer reported solid first-quarter numbers that topped analyst estimates, but included a warning about second-quarter revenue growth and uninspiring news that CFO Michael Giannetto would leave the company later this year. In response, SONO stock dropped more than 10%.To be sure, the quarter wasn't all bad news for Sonos. New products sold well in the quarter. Revenue growth was decent. Adjusted EBITDA margins continued to expand, and management maintained their full-year and long term revenue and EBITDA growth targets.But, just because the quarter wasn't a complete disaster, that doesn't mean this dip in SONO stock is worth buying. In fact, quite the opposite. Sonos increasingly looks like a niche consumer hardware company that will follow in the footsteps of GoPro (NASDAQ:GPRO) and Fitbit (NYSE:FIT).InvestorPlace - Stock Market News, Stock Advice & Trading TipsSecond-quarter numbers did nothing to deflate that bear thesis. As such, so long as the prevailing thesis here remains GoPro 2.0, investors should stay away from SONO stock, especially at prices above $10. GoPro 2.0 Thesis Still Holds Water for SonosIn early September, when Sonos was a $20 stock, I wrote a piece on why Sonos looked like GoPro 2.0. * 7 Reasons You Want Boeing Stock in Your Portfolio Broadly speaking, the thesis was that Sonos operates in a niche consumer hardware space with hardware that isn't terribly hard to replicate. Importantly, the company isn't big enough or have enough customers to benefit from network effects, and other companies in this space are much bigger with much larger customer ecosystems. As such, Sonos finds itself in a similar position today as GoPro and Fitbit found themselves in several quarters ago.The GoPro and Fitbit narrative ended poorly. The Sonos narrative will, too. It will come under increasing competitive pressure from bigger players. Sales growth will slow. Margin expansion will slow. Profit growth will slow. The whole company will slow, and that will have a negative impact on SONO stock.It appears the market is buying into this thesis. Since early September, SONO stock has lost about half of its value, and now trades just over $10.There wasn't anything in the Q1 report which provides much relief to bulls. Revenue growth was positive, but it was weak. Adjusted EBITDA margins moved higher, but that's because of lower marketing spend, which is diluting revenue growth. Also, gross margins dropped year-over-year due to an adverse product mix. The long term guide was maintained, but near-term inventory challenges in Q2 call into question the legitimacy of that long term guide.Overall, there was some good news in the first-quarter report, but not enough to override the prevailing bear thesis here. So long as that bear thesis remains front and center, SONO stock will struggle for gains. SONO Stock Isn't Cheap EnoughEven in my realistic best case scenario for Sonos, I don't think SONO stock is worth over $10 today.Management is guiding for long term revenue growth of 10%-plus. That seems aggressive considering slowing growth trends, huge competition, and lessened marketing spend. As such, I think mid-to-high-single-digit revenue growth is much more realistic over the next several years, and that $2 billion in revenue is doable by fiscal 2025.During that stretch, I expect margins to keep heading higher thanks to constrained marketing spend coupled with healthy revenue growth. By fiscal 2025, adjusted EBITDA margins have an opportunity to hit 10%.Under those assumptions, I think a realistic best case scenario for SONO stock is $1 in EPS by fiscal 2025. A market average 16 forward multiple on that implies a fiscal 2024 price target of $16. Discounted back by 10% per year, that equates to a fiscal 2019 price target for SONO stock below $10.Bottom line? The prevailing bear thesis on SONO stock currently looks pretty accurate. So long as revenue growth rates remain depressed and gross margins keep dropping, it won't go away. And so long as that bear thesis sticks around, SONO stock will struggle for gains.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Monster Growth Stocks to Buy for 2019 and Beyond * 7 Cloud Stocks To Buy Now * 5 Undervalued Stocks to Invest In Compare Brokers The post Sonos Stock Still Isn't Cheap Enough to Buy appeared first on InvestorPlace.
Here are some of the companies with shares expected to trade actively in Thursday’s session. Stock movements noted by ticker reflect movements during regular trading hours; premarket trading is specified separately.
Sonos, Inc. (NASDAQ: SONO) stock was down more than 13 percent Thursday despite a strong earnings beat and its most profitable-ever quarter as the market appeared to be spooked by the announcement that its chief financial officer is retiring. Sonos reported revenue and earnings that beat Street estimates and continues to grow by double digits despite competitive threats, Raymond James’ Adam Tindle wrote in a note. The announcement that Chief Financial Officer Michael Giannetto plans to retire and expectations for lower revenue in the second quarter shouldn’t outweigh the company’s strengths, Tindle said.
Dunkin' Brands DNKN – Shares of the restaurant operator dropped nearly 5 percent after the company reported revenue that missed estimates. For quarterly earnings, Dunkin' Brands beat estimates by three cents. Chipotle Mexican Grill CMG – Chipotle stock surged a whooping 14 percent after the restaurant chain reported adjusted quarterly profit of $1.72 per share, beating the consensus estimate of $1.37.
The Santa Barbara, California-based company said it had net income of 55 cents per share. The maker of wireless speakers and home sound systems posted revenue of $496.4 million in the period, exceeding ...
Inc. tumbled in after-hours trading Wednesday following the announcement that Chief Financial Officer Michael Giannetto plans to retire. Shares fell 4.9% to $11.76 after regular trading on the Nasdaq despite Sonos reporting better-than-expected results. The Santa Barbara, Calif.-based company reported the most profitable quarter in its young history, posting $496 million in revenue, which represented a 6% increase over the same period last year.
Sonos’ stock was down in after-hours trading despite beating Wall Street expectations in its first-quarter earnings report.
CFO Michael Giannetto, 55 years old and a seven-year Sonos veteran, will continue in his role until a successor is appointed later this year.
At the tail end of its shareholder letter for Q1 2019, Sonos disclosed that the company's Chief Financial Officer, Mike Giannetto, will be retiring "later this year". Giannetto has been with Sonos for seven years, helping to guide the company through its IPO back in August of 2018. Sonos stock dipped by about 17% immediately after the news was announced (from $12.37 at market close to $10.42 after hours) but has climbed its way back up a bit to around $11.76 per share.
Check out the companies making headlines after the bell:Shares of Chipotle CMG rose as much as 10 percent in extended trading Wednesday after the company reported earnings that beat Wall Street's expectations.
Feb.11 -- Sonos Inc. President and Chief Executive Officer Patrick Spence discusses the competitive environment in the speaker market and the company's international expansion and new product plans with Bloomberg's Emily Chang on "Bloomberg Technology."
Sonos CEO Patrick Spence joins "Squawk on the Street" to discuss the company after its strong earnings and as its CFO prepares to leave.