Strong week for Sonos (NASDAQ:SONO) shareholders doesn't alleviate pain of three-year loss

Sonos, Inc. (NASDAQ:SONO) shareholders should be happy to see the share price up 12% in the last month. But that doesn't change the fact that the returns over the last three years have been disappointing. Regrettably, the share price slid 61% in that period. So it's good to see it climbing back up. After all, could be that the fall was overdone.

Although the past week has been more reassuring for shareholders, they're still in the red over the last three years, so let's see if the underlying business has been responsible for the decline.

Check out our latest analysis for Sonos

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Sonos has made a profit in the past. On the other hand, it reported a trailing twelve months loss, suggesting it isn't reliably profitable. Other metrics may better explain the share price move.

Arguably the revenue decline of 3.9% per year has people thinking Sonos is shrinking. After all, if revenue keeps shrinking, it may be difficult to find earnings growth in the future.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

If you are thinking of buying or selling Sonos stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Sonos shareholders gained a total return of 19% during the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 1.9% endured over half a decade. So this might be a sign the business has turned its fortunes around. You could get a better understanding of Sonos' growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Of course Sonos may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.