Sonos, Inc. (NASDAQ: SONO) designs and markets audio systems for the home. Its product portfolio comprises Speaker sets and numerous accessories such as boost, mounts, stands, cables, and networking. The company's operations are spread over the Americas, Europe, the Middle East and Africa, and the Asia Pacific. The Americas generate the majority of the company's revenue.
Why Should Investors Book Profit?
Valuation Methodology: Price/Cash Flow Per Share Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
SONO's share price has declined 28.80% in the past six months and is currently leaning towards the lower band of the 52-week range of USD 21.46 to USD 44.72. We have valued the stock using the Price/Cash flow-based relative valuation methodology and arrived at a target price of USD 23.48.
Considering the company's declining profitability, weak margin profile, contraction of ROE, current valuation and associated risks. we recommend a "Sell" rating on the stock at the closing price of USD 26.92, traded flat, as of February 18, 2022.
Three-Year Technical Price Chart (February 18, 2022). Analysis by Kalkine Group
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.