NasdaqGS:SONO

Stock Analysis Report

Executive Summary

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.

Rewards

Trading at 53.7% below its fair value

Earnings are forecast to grow 48.11% per year

Earnings have grown 86.3% per year over the past 5 years

Risk Analysis

Shareholders have been substantially diluted in the past year



Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Sonos's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SONO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.6%

SONO

3.2%

US Consumer Durables

-1.5%

US Market


1 Year Return

19.3%

SONO

40.1%

US Consumer Durables

21.7%

US Market

Return vs Industry: SONO underperformed the US Consumer Durables industry which returned 33.1% over the past year.

Return vs Market: SONO underperformed the US Market which returned 21.2% over the past year.


Shareholder returns

SONOIndustryMarket
7 Day-4.6%3.2%-1.5%
30 Day-9.2%10.4%1.4%
90 Day5.5%8.7%7.9%
1 Year19.3%19.3%42.1%40.1%24.3%21.7%
3 Yearn/a39.6%33.3%49.5%39.9%
5 Yearn/a45.6%35.9%72.6%53.5%

Price Volatility Vs. Market

How volatile is Sonos's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sonos undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SONO ($14.6) is trading below our estimate of fair value ($31.56)

Significantly Below Fair Value: SONO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SONO is unprofitable, so we can't compare its PE Ratio to the Consumer Durables industry average.

PE vs Market: SONO is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SONO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SONO is overvalued based on its PB Ratio (5.6x) compared to the US Consumer Durables industry average (1.4x).


Next Steps

Future Growth

How is Sonos forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

48.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SONO is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: SONO is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: SONO's is expected to become profitable in the next 3 years.

Revenue vs Market: SONO's revenue (7.5% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: SONO's revenue (7.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SONO's Return on Equity is forecast to be high in 3 years time (25.6%)


Next Steps

Past Performance

How has Sonos performed over the past 5 years?

86.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SONO is currently unprofitable.

Growing Profit Margin: SONO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SONO is unprofitable, but has reduced losses over the past 5 years at a rate of 86.3% per year.

Accelerating Growth: Unable to compare SONO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SONO is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Durables industry (-1.5%).


Return on Equity

High ROE: SONO has a negative Return on Equity (-1.7%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sonos's financial position?


Financial Position Analysis

Short Term Liabilities: SONO's short term assets ($679.1M) exceed its short term liabilities ($402.5M).

Long Term Liabilities: SONO's short term assets ($679.1M) exceed its long term liabilities ($78.2M).


Debt to Equity History and Analysis

Debt Level: SONO's debt to equity ratio (11.8%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if SONO's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: SONO has a high level of physical assets or inventory.

Debt Coverage by Assets: SONO's debt is covered by short term assets (assets are 20.5x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable SONO has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: SONO is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 92.3% per year.


Next Steps

Dividend

What is Sonos's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate SONO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate SONO's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SONO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SONO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SONO's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Sonos's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Patrick Spence (44yo)

3yrs

Tenure

US$11,568,706

Compensation

Mr. Patrick Spence has been Chief Executive Officer and as a member of board of directors at Sonos, Inc. since January 2017, and has been its President since July 2016. He served as Managing Director of G ...


CEO Compensation Analysis

Compensation vs Market: Patrick's total compensation ($USD11.57M) is above average for companies of similar size in the US market ($USD3.81M).

Compensation vs Earnings: Patrick's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

2.8yrs

Average Tenure

44yo

Average Age

Experienced Management: SONO's management team is considered experienced (2.9 years average tenure).


Board Age and Tenure

6.3yrs

Average Tenure

52yo

Average Age

Experienced Board: SONO's board of directors are considered experienced (6.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$5,446,27120 May 19
Index Ventures
EntityCompany
Shares517,992
Max PriceUS$10.51
SellUS$2,054,81208 Mar 19
Index Ventures
EntityCompany
Shares209,039
Max PriceUS$9.83
SellUS$75,58128 Feb 19
Index Ventures
EntityCompany
Shares6,871
Max PriceUS$11.00
SellUS$6,021,86027 Feb 19
Index Ventures
EntityCompany
Shares541,062
Max PriceUS$11.15
SellUS$8,829,11525 Feb 19
Index Ventures
EntityCompany
Shares793,476
Max PriceUS$11.15
SellUS$5,312,18521 Feb 19
Index Ventures
EntityCompany
Shares466,799
Max PriceUS$11.54

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 58.1%.


Management Team

  • Thomas Cullen

    Co-Founder and VP of Sales & Marketing

    • Ingvar Meijers

      Managing Director of Sales and Operations for EMEA

      • Matt Siegel (45yo)

        Chief Commercial Officer

        • Tenure: 2.3yrs
        • Compensation: US$3.48m
      • Patrick Spence (44yo)

        CEO, President & Director

        • Tenure: 3yrs
        • Compensation: US$11.57m
      • Brittany Bagley (36yo)

        Chief Financial Officer

        • Tenure: 0.8yrs
        • Compensation: US$8.02m
      • Eddie Lazarus (60yo)

        Chief Legal Officer & Corporate Secretary

        • Tenure: 1yrs
        • Compensation: US$2.54m
      • Nicholas Millington (42yo)

        Chief Product Officer

        • Tenure: 2.8yrs
        • Compensation: US$3.53m
      • Michael Groeninger

        Vice President of Corporate Finance

        • Tenure: 4.8yrs
      • Anna Fraser (37yo)

        Chief People Officer

        • Tenure: 3yrs
      • David Perri (48yo)

        Chief Operations Officer

        • Tenure: 2.8yrs

      Board Members

      • Robbie Bach (57yo)

        Independent Director

        • Tenure: 8.4yrs
        • Compensation: US$300.64k
      • Julius Genachowski (56yo)

        Independent Director

        • Tenure: 6.3yrs
        • Compensation: US$316.91k
      • Mike Volpi (53yo)

        Independent Chairperson

        • Tenure: 9.2yrs
      • Tom Conrad (49yo)

        Independent Director

        • Tenure: 2.8yrs
        • Compensation: US$272.48k
      • John Maeda (52yo)

        Independent Director

        • Tenure: 7.6yrs
        • Compensation: US$300.64k
      • Patrick Spence (44yo)

        CEO, President & Director

        • Tenure: 3yrs
        • Compensation: US$11.57m
      • Karen Boone (45yo)

        Independent Director

        • Tenure: 2.6yrs
        • Compensation: US$279.96k

      Company Information

      Sonos, Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Sonos, Inc.
      • Ticker: SONO
      • Exchange: NasdaqGS
      • Founded: 2002
      • Industry: Consumer Electronics
      • Sector: Consumer Durables
      • Market Cap: US$1.502b
      • Shares outstanding: 108.82m
      • Website: https://www.sonos.com

      Number of Employees


      Location

      • Sonos, Inc.
      • 614 Chapala Street
      • Santa Barbara
      • California
      • 93103
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      SONONasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 2018
      8SODB (Deutsche Boerse AG)YesCommon StockDEEURAug 2018
      0ZFNLSE (London Stock Exchange)YesCommon StockGBUSDAug 2018
      SONOWBAG (Wiener Boerse AG)YesCommon StockATEURAug 2018

      Biography

      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 founded in 2002 and is headquartered in Santa Barbara, California. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/29 01:23
      End of Day Share Price2020/01/28 00:00
      Earnings2019/09/28
      Annual Earnings2019/09/28


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.