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

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

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

WHAT YOU SHOULD KNOW

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%.

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.   

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.

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

BOTTOM LINE

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.

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.

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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