Sonos (SONO) & Its Peers Critical Analysis

Sonos (NASDAQ:SONO) is one of 149 publicly-traded companies in the “Household Durables” industry, but how does it contrast to its competitors? We will compare Sonos to related businesses based on the strength of its risk, dividends, earnings, profitability, analyst recommendations, valuation and institutional ownership.

Earnings & Valuation

This table compares Sonos and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Sonos	$1.44 billion	-$61.14 million	33.98
Sonos Competitors	$5.27 billion	$319.31 million	14.61

Sonos’ competitors have higher revenue and earnings than Sonos. Sonos is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings for Sonos and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonos	0	3	2	0	2.40
Sonos Competitors	1734	7280	8056	301	2.40

Sonos presently has a consensus target price of $20.00, suggesting a potential upside of 30.80%. As a group, “Household Durables” companies have a potential upside of 44.82%. Given Sonos’ competitors higher possible upside, analysts clearly believe Sonos has less favorable growth aspects than its competitors.

Volatility & Risk

Sonos has a beta of 1.95, suggesting that its share price is 95% more volatile than the S&P 500. Comparatively, Sonos’ competitors have a beta of 1.74, suggesting that their average share price is 74% more volatile than the S&P 500.

Profitability

This table compares Sonos and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sonos	3.82%	19.10%	8.67%
Sonos Competitors	-21.29%	-17.54%	1.12%

Insider & Institutional Ownership

85.8% of Sonos shares are held by institutional investors. Comparatively, 53.7% of shares of all “Household Durables” companies are held by institutional investors. 1.3% of Sonos shares are held by insiders. Comparatively, 18.5% of shares of all “Household Durables” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Sonos beats its competitors on 7 of the 13 factors compared.

About Sonos

Sonos, Inc., together with its subsidiaries, designs, develops, manufactures, and sells audio products and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers wireless, portable, and home theater speakers; components; and accessories. The company 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. The company was formerly known as Rincon Audio, Inc. and changed its name to Sonos, Inc. in May 2004. Sonos, Inc. was incorporated in 2002 and is headquartered in Santa Barbara, California.