Sonos (SONO) AI Stock Analysis

• Market Cap: $1.66B
• Dividend Yield: N/A
• Average Volume (3M): 2.40M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.65
• Revenue Growth: -10.02%
• EPS Growth: -385.04%
• Country: US
• Employees: 1,708
• Sector: Technology
• Sector Strength: 84
• Industry: Consumer Electronics
• EPS (TTM): -0.03
• Shares Outstanding: 120,880,280
• 10 Day Avg. Volume: 1,788,984
• 30 Day Avg. Volume: 2,403,924
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.66
• Enterprise Value/Revenue: 0.78
• Enterprise Value/Gross Profit: 1.81
• Enterprise Value/Ebitda: -36.39
• 1Y Price Target: $13.83
• Price Target Upside: -1.71% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 58 Neutral
• Price Target: $14.00 ▼(-0.50% Downside)

Sonos' overall stock score is driven by its financial challenges, including declining revenue and profitability, which weigh heavily on the score. However, positive technical momentum and strategic leadership changes provide some optimism. The valuation remains a concern due to negative earnings, and while the earnings call showed operational improvements, revenue decline and external challenges persist.

Positive Factors

Financial Performance

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.

Strategy Pivot

Actions to maximize gross profit, including promotions and pricing strategy, mark a pivot in Sonos' strategy, potentially lowering the friction of onboarding new users.

Negative Factors

Competitive Pressure

There remain a number of moving pieces in the SONO story, including a declining TAM and pricing pressure from competitors.

Market Challenges

Topline concerns persist with a declining total addressable market and pricing pressure from competitors.

Sonos Business Overview & Revenue Model

Company Description

Sonos, Inc. is a global leader in smart audio products and home sound systems, headquartered in Santa Barbara, California. Founded in 2002, Sonos designs and manufactures a range of wireless speakers, soundbars, and home theater systems that deliver high-quality sound and seamless integration with various streaming services. The company operates primarily in the consumer electronics sector and is known for its commitment to innovation in multi-room audio and smart home technology, enhancing the listening experience through advanced connectivity and user-friendly interfaces.

How the Company Makes Money

Sonos generates revenue primarily through the sale of its hardware products, including wireless speakers, soundbars, and accessories. A significant portion of its earnings comes from direct sales to consumers via its online platform and retail partnerships with major electronics retailers. Additionally, Sonos has established partnerships with various music streaming services, which enhance the functionality of its devices and drive customer engagement. The company also benefits from software and service offerings, such as premium features and subscription services that may be bundled with its products. Seasonal promotions and new product launches further contribute to revenue fluctuations, making product innovation and customer loyalty critical to its financial success.

Sonos Financial Statement Overview

Summary

Sonos faces challenges across its financial statements, with declining revenue and profitability, stable but unprofitable balance sheet, and weak cash flow performance. The company needs to address operational inefficiencies and improve profitability to enhance its financial health.

Income Statement

Sonos has experienced declining revenue over the TTM period with a negative revenue growth rate of -3.58%. The gross profit margin has decreased slightly from previous years, indicating pressure on profitability. The net profit margin is negative, reflecting ongoing losses. The EBIT and EBITDA margins are also negative, highlighting operational challenges. Overall, the income statement shows declining performance and profitability issues.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.14, indicating a manageable level of leverage. However, the return on equity is negative, reflecting the company's inability to generate profits from its equity base. The equity ratio is stable, suggesting a reasonable proportion of equity financing. Overall, the balance sheet is stable but lacks profitability.

Cash Flow

Operating cash flow has decreased significantly, and free cash flow growth is negative, indicating cash flow challenges. The operating cash flow to net income ratio is positive, showing some ability to generate cash from operations despite losses. However, the free cash flow to net income ratio is below 1, indicating insufficient free cash flow relative to net income. Overall, cash flow performance is weak with declining trends.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.41B	1.52B	1.66B	1.75B	1.72B	1.33B
Gross Profit	607.76M	689.37M	716.49M	796.37M	809.99M	571.96M
EBITDA	-30.24M	25.67M	54.10M	107.79M	191.40M	17.83M
Net Income	-76.38M	-38.15M	-10.27M	67.38M	158.59M	-20.11M
Balance Sheet
Total Assets	834.40M	916.31M	1.00B	1.19B	1.14B	816.05M
Cash, Cash Equivalents and Short-Term Investments	253.95M	221.16M	220.23M	274.86M	640.10M	407.10M
Total Debt	55.15M	64.14M	56.11M	36.13M	44.68M	86.19M
Total Liabilities	435.10M	487.69M	483.58M	627.88M	569.76M	518.21M
Stockholders Equity	399.31M	428.62M	518.66M	560.51M	569.04M	297.84M
Cash Flow
Free Cash Flow	57.03M	134.66M	50.12M	-74.48M	207.69M	128.95M
Operating Cash Flow	96.21M	189.91M	100.41M	-28.26M	253.23M	161.99M
Investing Cash Flow	-41.26M	-105.24M	-50.29M	-172.63M	-45.53M	-69.32M
Financing Cash Flow	-82.83M	-137.31M	-108.59M	-150.26M	24.97M	-27.09M

Sonos Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SONO, the sentiment is Positive. The current price of 14.07 is above the 20-day moving average (MA) of 13.15, above the 50-day MA of 11.79, and above the 200-day MA of 11.95, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 71.46 is Negative, neither overbought nor oversold. The STOCH value of 86.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SONO.

Sonos Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TBCH	74 Outperform	$298.29M	15.85	17.97%	―	24.09%	―
Sector *	61 Neutral	$35.51B	8.11	-11.05%	1.89%	8.55%	-8.72%
GPRO	61 Neutral	$239.62M	―	-76.81%	―	-19.83%	73.22%
SONO	58 Neutral	$1.66B	―	-17.69%	―	-10.02%	-385.04%
KOSS	56 Neutral	$58.87M	―	-2.83%	―	2.93%	8.95%
ZEPP	54 Neutral	$696.28M	―	-28.36%	―	-18.94%	-197.82%
UEIC	52 Neutral	$64.02M	―	-10.48%	―	4.00%	62.67%

Sonos Corporate Events

Sonos Appoints Tom Conrad as CEO and President

On July 22, 2025, Sonos appointed Tom Conrad as Chief Executive Officer and President, following his interim CEO role since January 2025. Under his leadership, Sonos has made significant progress, including enhancing software and product experiences, and launching new innovations. His appointment is expected to lead Sonos into a new phase of growth, focusing on customer satisfaction, innovation, and leveraging technology to create more immersive and intelligent experiences.