Wall Street analysts’ outlook for Sonos Inc. (SONO)

Sonos Inc. (NASDAQ: SONO) stock jumped 1.02% on Friday to $22.80 against a previous-day closing price of $22.57. With 1.88 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.44 million shares. During the session, the Consumer Electronics company that operates in wider Technology sector, reached to the highest price of $22.97 whereas the lowest price it dropped to was $22.23. The 52-week range on SONO shows that it touched its highest point at $42.57 and its lowest point at $17.43 during that stretch. It currently has a 1-year price target of $29.43. Beta for the stock currently stands at 1.91.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SONO was up-trending over the past week, with a rise of 3.73%, but this was up by 18.69% over a month. Three-month performance dropped to -6.25% while six-month performance fell -10.80%. The stock lost -31.01% in the past year, while it has lost -23.49% so far this year. A look at the trailing 12-month EPS for SONO yields 0.98 with Next year EPS estimates of 1.45. For the next quarter, that number is 0.07. This implies an EPS growth rate of 717.10% for this year and 27.01% for next year. EPS is expected to grow by 10.40% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 37.50%.

Float and Shares Shorts:

At present, 128.11 million SONO shares are outstanding with a float of 126.28 million shares on hand for trading. On Jul 14, 2022, short shares totaled 11.64 million, which was 9.10% higher than short shares on Jun 14, 2022. In addition to Mr. Patrick Spence as the firm’s CEO, Pres & Director, Ms. Brittany Bagley serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 98.00% of SONO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 52.55% of SONO, in contrast to 43.61% held by mutual funds. Shares owned by individuals account for 15.22%. As the largest shareholder in SONO with 14.77% of the stake, BlackRock Fund Advisors holds 18,882,689 shares worth 18,882,689. A second-largest stockholder of SONO, The Vanguard Group, Inc., holds 13,257,637 shares, controlling over 10.37% of the firm’s shares. American Century Investment Manag is the third largest shareholder in SONO, holding 4,664,749 shares or 3.65% stake. With a 7.05% stake in SONO, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 9,019,043 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.95% of SONO stock, is the second-largest Mutual Fund holder. It holds 3,773,068 shares valued at 68.07 million. American Century Ultra Fund holds 2.82% of the stake in SONO, owning 3,602,000 shares worth 64.98 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Apr 01, 2022, SONO reported revenue of $399.78M and operating income of $10.04M. Over the past year, revenue came in at $1.80B while operating income stood at $147.82M. It generated $8.57M net income for the quarter, which came to $141.13M over the last twelve months. The EBITDA in the recently reported quarter was $17.46M and diluted EPS was $0.06. EBITDA for the full year was $180.03M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SONO since 8 analysts follow the stock currently. There are 3 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SONO analysts setting a high price target of $40.00 and a low target of $20.00, the average target price over the next 12 months is $30.17. Based on these targets, SONO could surge 75.44% to reach the target high and fall by -12.28% to reach the target low. Reaching the average price target will result in a growth of 32.32% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SONO will report FY 2022 earnings on 11/17/2022. Analysts have provided yearly estimates in a range of $1.29 being high and $1.06 being low. For SONO, this leads to a yearly average estimate of $1.14. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Sonos Inc. surprised analysts by $0.01 when it reported $0.06 EPS against a consensus estimate of $0.05. The surprise factor in the prior quarter was -$0.00. Based on analyst estimates, the high estimate for the next quarter is $0.13. The average estimate for the next quarter is thus $0.06.

Summary of Insider Activity:

Insiders traded SONO stock several times over the past three months with 10 Buys and 13 Sells. In these transactions, 702,620 shares were bought while 463,751 shares were sold. The number of buy transactions has increased to 48 while that of sell transactions has risen to 49 over the past year. The total number of shares bought during that period was 2,575,057 while 1,769,262 shares were sold.

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