Sonos (SONO) AI Stock Analysis

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Sonos

(NASDAQ:SONO)

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Neutral 59 (OpenAI - 4o)

Rating:59Neutral

Price Target:

$19.50

▲(16.35% Upside)

Sonos's overall score is driven by strong technical momentum and strategic initiatives highlighted in the earnings call. However, profitability challenges and valuation concerns weigh down the score. The company's focus on market expansion and cost efficiency offers potential for future improvement.

Positive Factors

Operational Efficiency

Sonos' ability to reduce operating expenses by 15% year-over-year indicates strong operational efficiency, which can enhance profitability and financial health over the long term.

Brand Strength

Being the top home theater brand in the U.S. underscores Sonos' strong brand equity and competitive advantage, supporting sustained market leadership and customer loyalty.

Free Cash Flow Improvement

The improvement in free cash flow from negative to positive indicates better cash management, enhancing Sonos' ability to invest in growth opportunities and maintain financial stability.

Negative Factors

Revenue Decline

A 13% year-over-year revenue decline highlights ongoing challenges in maintaining growth, which could affect long-term financial performance and market position.

Tariff Challenges

Tariff-related costs and necessary price adjustments can pressure margins and affect competitiveness, posing a risk to profitability and pricing strategy.

Cyclical Market Challenges

Cyclical challenges in the market, including weak housing data, may hinder growth prospects, impacting Sonos' ability to expand its market share and revenue base.

Sonos (SONO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.00B

Dividend YieldN/A

Average Volume (3M)1.27M

Price to Earnings (P/E)―

Beta (1Y)1.52

Revenue Growth-4.93%

EPS Growth-59.17%

CountryUS

Employees1,708

SectorTechnology

Sector Strength88

IndustryConsumer Electronics

Share Statistics

EPS (TTM)-0.31

Shares Outstanding120,240,654

10 Day Avg. Volume969,690

30 Day Avg. Volume1,270,959

Financial Highlights & Ratios

PEG Ratio-0.47

Price to Book (P/B)5.20

Price to Sales (P/S)1.28

P/FCF Ratio17.08

Enterprise Value/Market Cap0.84

Enterprise Value/Revenue1.16

Enterprise Value/Gross Profit2.66

Enterprise Value/Ebitda112.65

Forecast

1Y Price Target

$19.67

Price Target Upside17.36% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Sonos Business Overview & Revenue Model

Company DescriptionSonos, Inc., together with its subsidiaries, designs, develops, manufactures, and sells multi-room audio products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides wireless speakers, home theater speakers, components, and accessories. It offers its products through approximately 10,000 third-party retail stores, including custom installers of home audio systems; and e-commerce retailers, as well as through its Website sonos.com. The company was formerly known as Rincon Audio, Inc. and changed its name to Sonos, Inc. in May 2004. Sonos, Inc. was incorporated in 2002 and is headquartered in Santa Barbara, California.

How the Company Makes MoneySonos generates revenue through the sale of its audio hardware products, which include smart speakers, soundbars, and accessories. A significant portion of its earnings comes from direct-to-consumer sales via its website and retail partners. Additionally, Sonos offers subscription-based services that enhance its product functionality, though hardware sales remain the primary revenue driver. The company has also formed strategic partnerships with various streaming services, which not only broaden its ecosystem but also promote its devices as preferred options for users of those services. These partnerships help to increase brand visibility and consumer adoption, contributing positively to its overall revenue growth.

Sonos Key Performance Indicators (KPIs)

Any

Revenue by Geography

Revenue by Geography
Breaks down revenue across different regions, revealing where Sonos is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.

Chart InsightsSonos' revenue in the Americas shows resilience, with a recent uptick, while EMEA and APAC remain volatile. Despite a 13% year-over-year revenue decline, the company exceeded Q3 expectations, driven by strong performance in portables and component products. Operational efficiencies and cost reductions are helping mitigate tariff impacts and cyclical challenges. The mixed sentiment from the earnings call highlights Sonos' strategic positioning and brand strength, but ongoing macroeconomic pressures and tariff challenges could continue to affect regional performance, particularly in EMEA and APAC.

Data provided by:

The Fly

Sonos Earnings Call Summary

Earnings Call Date:Nov 05, 2025

(Q4-2025)

% Change Since: |

Next Earnings Date:Feb 11, 2026

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with strong revenue growth in Q4, particularly in EMEA and growth markets, and improved gross margins. However, challenges remain with a full-year revenue decline and significant tariff impacts expected on margins. The company's strategy to focus on a cohesive system and expand market share reflects optimism for future growth.

Q4-2025 Updates

Positive Updates

Revenue Growth

In Q4, Sonos grew revenues by 13% year-over-year, reaching $288 million, which was near the high end of their guidance range.

Strong Performance in EMEA and Growth Markets

EMEA experienced strong double-digit growth, and growth markets more than doubled in Q4, contributing over 1/4 of the overall Q4 growth rate.

Improved Gross Margin

Q4 GAAP gross margin was 43.7%, and non-GAAP gross margin was 45.1%, both at the high end of the guidance range, with improvements of nearly 340 and 400 basis points respectively from the previous year.

Positive Adjusted EBITDA

Q4 adjusted EBITDA was positive $6 million, a $29 million improvement year-over-year due to higher revenue, better gross margin, and lower operating expenses.

Strong Share Repurchase Activity

In fiscal 2025, Sonos spent $81 million to repurchase 5.7 million shares, reducing their share count by 1.3% in Q4 alone.

Growth in Installed Base

The installed base grew by 5% to 17.1 million households, with devices per average household increasing to 3.13.

Negative Updates

Revenue Decline for Full Year

For fiscal 2025, overall revenue declined by 5% year-over-year.

Tariff Impact on Margins

Tariffs are expected to have a 300-400 basis points impact on margins, with a fully realized impact of about 100 basis points across the whole business.

Challenges in U.S. Market

While there was growth in some segments, the U.S. market faced challenges with tariffs and competitive pressures impacting performance.

Company Guidance

In the Sonos Fourth Quarter and Fiscal 2025 Earnings Conference Call, several key financial metrics and strategic initiatives were highlighted. Sonos reported a 13% year-over-year increase in Q4 revenue, reaching $288 million, which was near the high end of their guidance range. The company's non-GAAP gross margin was 45.1%, and adjusted EBITDA was $6 million, exceeding the midpoint of their guidance by $4 million. For fiscal 2025, revenue totaled $1.44 billion, with a 5% decline year-over-year; however, the company saw double-digit growth in its growth markets. Sonos also increased its installed base by 5% to 17.1 million households, with an average of 3.13 devices per household. Operating expenses decreased by 8% on a GAAP basis and by 10% on a non-GAAP basis. Looking forward, Sonos provided Q1 fiscal 2026 revenue guidance in the range of $510 million to $560 million, with a GAAP gross margin of 44% to 46% and adjusted EBITDA expected to grow by 27% year-over-year. The company emphasized its new strategic focus on creating a cohesive sound system for the home and expanding its market share in the $24 billion global premium audio market.

Sonos Financial Statement Overview

Summary

Sonos shows strong revenue growth but struggles with profitability due to negative margins. The balance sheet is stable with low leverage, but negative ROE is concerning. Cash flow is solid, yet recent declines in free cash flow growth suggest potential cash management issues.

Income Statement

Sonos has shown a mixed performance in its income statement. The company experienced a significant revenue growth of 24.92% in the latest period, indicating strong sales momentum. However, profitability remains a concern with negative net profit margins and EBIT margins, reflecting ongoing operational challenges. The gross profit margin is relatively stable, but the negative EBITDA margin highlights inefficiencies in cost management.

Balance Sheet

The balance sheet of Sonos reveals moderate financial stability. The debt-to-equity ratio is low, suggesting conservative leverage and a manageable debt load. However, the return on equity is negative, indicating that the company is not generating sufficient returns on shareholders' investments. The equity ratio is reasonable, showing a solid capital structure, but the negative ROE is a concern for long-term profitability.

Cash Flow

Sonos's cash flow statement shows some positive aspects. The operating cash flow is strong relative to net income, indicating good cash generation from operations. However, the free cash flow growth has been negative in the latest period, which could impact future investments. The free cash flow to net income ratio is not available, but the overall cash flow position suggests a need for improved cash management.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.44B	1.44B	1.52B	1.66B	1.75B	1.72B
Gross Profit	630.53M	630.53M	689.37M	716.49M	796.37M	809.99M
EBITDA	14.89M	12.29M	25.67M	54.10M	107.79M	191.40M
Net Income	-61.14M	-61.14M	-38.15M	-10.27M	67.38M	158.59M
Balance Sheet
Total Assets	823.28M	823.28M	916.31M	1.00B	1.19B	1.14B
Cash, Cash Equivalents and Short-Term Investments	227.53M	227.53M	221.16M	220.23M	274.86M	640.10M
Total Debt	53.29M	53.29M	64.14M	56.11M	36.13M	44.68M
Total Liabilities	468.05M	468.05M	487.69M	483.58M	627.88M	569.76M
Stockholders Equity	355.23M	355.23M	428.62M	518.66M	560.51M	569.04M
Cash Flow
Free Cash Flow	108.19M	108.19M	134.66M	50.12M	-74.48M	207.69M
Operating Cash Flow	136.87M	136.87M	189.91M	100.41M	-28.26M	253.23M
Investing Cash Flow	-29.52M	-29.52M	-105.24M	-50.29M	-172.63M	-45.53M
Financing Cash Flow	-102.34M	-102.34M	-137.31M	-108.59M	-150.26M	24.97M

Sonos Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price16.76

Price Trends

50DMA

17.59

Negative

100DMA

16.54

Positive

200DMA

13.41

Positive

Market Momentum

MACD

-0.22

Positive

RSI

37.08

Neutral

STOCH

16.20

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SONO, the sentiment is Neutral. The current price of 16.76 is below the 20-day moving average (MA) of 17.92, below the 50-day MA of 17.59, and above the 200-day MA of 13.41, indicating a neutral trend. The MACD of -0.22 indicates Positive momentum. The RSI at 37.08 is Neutral, neither overbought nor oversold. The STOCH value of 16.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SONO.

Sonos Risk Analysis

Sonos disclosed 40 risk factors in its most recent earnings report. Sonos reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Sonos Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TBCH	64 Neutral	$255.10M	15.55	17.19%	―	6.43%	196.68%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SONO	59 Neutral	$2.00B	-31.98	-15.60%	―	-4.93%	-59.17%
GPRO	50 Neutral	$240.30M	-1.91	-91.95%	―	-27.37%	70.46%
KOSS	49 Neutral	$40.47M	-185.78	-0.69%	―	11.58%	81.08%
UEIC	48 Neutral	$47.32M	-2.14	-14.35%	―	2.35%	18.83%
ZEPP	44 Neutral	$467.11M	-6.83	-24.39%	―	13.27%	-66.48%

* Technology Sector Average

Performance Comparison

SONO

Sonos

16.76

2.24

15.43%

GPRO

GoPro

1.48

0.40

37.04%

KOSS

Koss

4.31

-3.02

-41.20%

TBCH

Turtle Beach

13.42

-3.88

-22.43%

UEIC

Universal Electronics

3.57

-6.26

-63.68%

ZEPP

Zepp Health

28.08

24.89

780.25%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Nov 26, 2025