Sonos Stock Trades 20% Below Highs


 

Sonos shares are trading 20% ​​below their highs. The company is engaged in the production of audio equipment: wireless speakers, home theaters, etc. With changing consumer habits and a bias towards streaming services, Sonos products will continue to be in high demand. Streaming services like Disney and Netflix are the main beneficiaries of the current trend, so the creators of technology that will allow you to fully enjoy their content will be in a tangible plus.

Management expects that by the end of 2021 the firm will be able to cover only 9% of the premium audio market, estimated at $ 18 billion, which means there is still potential for further revenue growth. Sonos spends heavily on marketing. One example is the collaboration with IKEA: the companies have produced a joint product “SYMFONISK” (from $ 99).

In the second quarter of 2021, Sonos' revenue increased 90% YoY to $ 332.9 million, much better than Wall Street analysts had predicted 42% YoY growth. In addition, the gross margin rose 300 basis points to 49.8%, driven by improved efficiency in high-value product creation. R&D, sales, and marketing expenses are still increasing, but the size of the adjusted EBITDA does not suffer from this: if a year ago it was equal to minus $ 28.4 million, then at the end of the last quarter it is already $ 48.5 million.

 

 

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