Sonos Inc., (NASDAQ:SONO) the home audio business which develops wireless multi-room systems, topped fourth-quarter fiscal 2021 earnings estimates on 17 November.  

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Company shares have surged 50.7% over the past year and delivered positive earnings (EPS) against Wall Street’s expected loss.

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The California-based Sonos is a speaker company that competes against Bose and others such as Apple (NASDAQ:AAPL) in the higher-end audio market.

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WHAT YOU SHOULD KNOW

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In the past four weeks, to close the last trading session at $32.25, shares of Sonos have gained 0.5%. And going by price targets, the intended estimate of $47.80 indicates a potential upside of 48.2%.

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Sonos (SONO) may decrease or discontinue service to its older products and risks remain that such a move may damage relationships with current customers, its reputation, brand loyalty, and the ability to attract new customers.  

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However, there has been increasing optimism among investors about the company’s earnings prospects.   Sonos noted that although the company has been negatively impacted by COVID-19, it has also witnessed an increased demand for its products as people were forced to stay indoors during the pandemic.

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Morgan Stanley analyst Kathryn Huberty highlighted that Sonos’ stronger-than-estimated guidance indicates how soon the company will penetrate a large addressable market.

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BOTTOM LINE

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Given its impressive externally-audited track record and revisions, Sonos currently ranks number one on Zacks as a strong buy based on earnings estimates factors.

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Despite strong results, the stock is trading below where it was on 17 November. Sono is also down around 17% in the last three months when it closed Monday about 27% below its April records at $32.21 a share.

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When looking ahead, Zacks estimates call for Sonos revenue to climb 14% this year and another 12.3% in FY23 to reach $2.19 billion.

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