Sonos (SONO) AI Stock Analysis

• Market Cap: $1.25B
• Dividend Yield: N/A
• Average Volume (3M): 1.78M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.59
• Revenue Growth: -5.24%
• EPS Growth: -67.92%
• Country: US
• Employees: 1,708
• Sector: Technology
• Sector Strength: 81
• Industry: Consumer Electronics
• EPS (TTM): -0.58
• Shares Outstanding: 120,087,494
• 10 Day Avg. Volume: 1,365,528
• 30 Day Avg. Volume: 1,777,870
• PEG Ratio: 3.64
• Price to Book (P/B): 4.99
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.39
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 0.18
• Enterprise Value/Gross Profit: 1.69
• Enterprise Value/Ebitda: 19.05
• 1Y Price Target: $11.67
• Price Target Upside: 17.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 59 Neutral
• Price Target: $10.50 ▲(5.74%Upside)

Sonos is facing significant financial challenges with declining revenue and profitability, impacting its valuation negatively. However, strong cash management and strategic adjustments highlighted in the earnings call, along with positive corporate changes, provide some optimism. The overall score reflects these mixed signals, with financial performance being the most critical factor.

Positive Factors

Gross Margins

Sonos is outperforming gross margins through thoughtful inventory management and mix, achieving impressive gross margin outperformance this quarter.

Market Share

Sonos is gaining market share, most notably within the home theater market, driven by the strength in Arc Ultra.

Negative Factors

Consumer Feedback

Sonos has faced consistent negative consumer feedback from existing Sonos product users that have complained about a multitude of functionality issues with the new app.

Leadership Uncertainty

Entering a period of elevated uncertainty as Sonos searches for its next CEO.

Sonos Business Overview & Revenue Model

Company Description

Sonos, 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 Money

Sonos generates revenue primarily through the sale of its audio products, which include wireless speakers, soundbars, and home theater systems. The company markets its products directly to consumers via its online platform and through various retail partners, including electronic stores, department stores, and specialty retailers. Sonos also partners with streaming service providers to integrate their platforms into its devices, enhancing the overall user experience and encouraging product adoption. Additionally, the company leverages its brand reputation for high-quality sound and design to maintain premium pricing on its products, contributing significantly to its earnings. Sonos continually invests in research and development to innovate and expand its product offerings, which helps drive sales and supports its revenue growth.

Sonos Financial Statement Overview

Summary

Sonos faces challenges with declining revenue and profitability, reflected in negative net income and EBIT margins. The balance sheet remains stable with moderate leverage, but negative ROE highlights inefficiencies. Strong operating cash flow and positive free cash flow demonstrate resilience in cash management, crucial for navigating current financial pressures.

Income Statement

Sonos has experienced declining revenue over the past few years with TTM revenue of $1.46 billion, down from $1.75 billion in 2022. The gross profit margin has decreased slightly, indicating some pressure on cost efficiency. The company has been operating at a net loss recently, with TTM net income at -$69.29 million, compared to a profit in 2021. EBIT and EBITDA margins are negative, reflecting operational challenges.

Balance Sheet

Sonos maintains a moderate debt-to-equity ratio with TTM total debt at $63.03 million and stockholders' equity of $382.86 million. The equity ratio is relatively stable at 48.34%, suggesting a solid equity base. However, the return on equity is negative due to net losses, indicating ineffective use of equity capital.

Cash Flow

Despite net losses, Sonos generated positive operating cash flow of $122.26 million TTM. Free cash flow has decreased but remains positive at $64.61 million. The free cash flow to net income ratio is favorable, indicating effective cash management despite profitability issues.

Breakdown
TTM	Sep 2024	Sep 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.66B	1.52B	1.66B	1.75B	1.72B	1.33B
	Gross Profit
716.49M	689.37M	716.49M	796.37M	809.99M	571.96M
	EBIT
-20.54M	-48.05M	-20.55M	69.28M	154.96M	-18.60M
	EBITDA
54.10M	25.67M	54.10M	107.79M	191.40M	17.83M
	Net Income Common Stockholders
-10.27M	-38.15M	-10.27M	67.38M	158.59M	-20.11M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
291.56M	221.16M	220.23M	274.86M	640.10M	407.10M
	Total Assets
925.62M	916.31M	1.00B	1.19B	1.14B	816.05M
	Total Debt
59.27M	64.14M	56.11M	36.13M	44.68M	86.19M
	Net Debt
-186.69M	-105.59M	-164.12M	-238.73M	-595.42M	-320.91M
	Total Liabilities
431.61M	487.69M	483.58M	627.88M	569.76M	518.21M
	Stockholders Equity
494.00M	428.62M	518.66M	560.51M	569.04M	297.84M
Cash Flow		Free Cash Flow
50.12M	134.66M	50.12M	-74.48M	207.69M	128.95M
	Operating Cash Flow
100.41M	189.91M	100.41M	-28.26M	253.23M	161.99M
	Investing Cash Flow
-50.29M	-105.24M	-50.29M	-172.63M	-45.53M	-69.32M
	Financing Cash Flow
-108.59M	-137.31M	-108.59M	-150.26M	24.97M	-27.09M

Sonos Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.93
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SONO, the sentiment is Negative. The current price of 9.93 is below the 20-day moving average (MA) of 10.16, above the 50-day MA of 9.65, and below the 200-day MA of 12.16, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 46.80 is Neutral, neither overbought nor oversold. The STOCH value of 37.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SONO.

Sonos Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HIMX	74 Outperform	$1.60B	18.28	9.79%	3.19%	0.61%	80.97%
COUR	73 Outperform	$1.35B	―	-10.84%	―	7.26%	39.62%
CRSR	67 Neutral	$962.97M	―	-15.20%	―	-6.53%	-1059.95%
ROG	65 Neutral	$1.25B	75.12	1.34%	―	-8.06%	-75.10%
Sector *	62 Neutral	$11.92B	10.03	-7.37%	3.70%	7.32%	-8.25%
SONO	59 Neutral	$1.25B	―	-15.80%	―	-5.24%	-67.92%
NTGR	56 Neutral	$783.49M	32.85	4.78%	―	-6.97%	―

Sonos Corporate Events

Sonos Appoints Hugo Barra to Board of Directors

On April 7, 2025, Sonos appointed Hugo Barra to its Board of Directors, effective immediately, as a Class III director with a term expiring in 2027. Hugo Barra, a seasoned technologist with extensive experience in consumer tech and AI, is expected to bring valuable insights to Sonos. Concurrently, Mike Volpi, the longest-serving director, resigned from the board after 15 years of service, with no disagreements cited. Volpi’s departure marks the end of a significant era for Sonos, while Barra’s appointment is anticipated to strengthen the company’s strategic direction and innovation capabilities.