One-glance verdict
Within fair range
$15.99 our estimate vs market $15.84
Wall Street consensus: $18.62 (16.5% higher than our fair-value estimate)
1% below our estimate
Fundamentals snapshot
Sonos, Inc.
SONO · NMS · Technology · Consumer Electronics
Current price
$15.84
52-week range
$12.44 - $19.82
Market cap
$1.87B
Balance sheet
Healthy
-70.87x Concerning
Net cash $204.20M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 3.3% last year.
- Reward Returns 14.2% on equity, ahead of 40% of its peers.
- Risk Stock trades 24.1% above its 5-year average P/E.
- Risk Operating margin compressed from 5.1% to 4.4% over 3 years.
What this company does
Sonos, Inc.
Sonos sells high-end wireless speakers, soundbars, and headphones that are designed to work together throughout a home. The company makes most of its money from these one-time hardware sales, focusing on getting customers to buy their first product and then add more over time. This strategy creates an ecosystem (a family of products that work together), encouraging repeat purchases from a loyal customer base.
How the company got here
Founded in 2002, Sonos set out to reinvent home audio for the digital age. The founders envisioned a system that could play music wirelessly in any room, controlled from the palm of your hand. After launching its first products in 2005, a key turning point was the release of the iPhone; Sonos created an app that turned the phone into a controller, making its system much more accessible. The company went public in 2018, trading on the NASDAQ stock exchange.
What it actually does
Sonos sells a range of audio products that connect to each other wirelessly over a Wi-Fi network. This allows you to play music in a single room or have the same song playing perfectly synchronized throughout your entire house. Their products include speakers of different sizes, soundbars for TVs, subwoofers for deep bass, and components to connect your existing stereo equipment to the Sonos system. Recently, the company expanded into personal audio with the launch of its first headphones.
Sonos Speakers
This is the company's core business and largest source of revenue (the money it makes from sales). It includes a variety of wireless speakers designed for different rooms and purposes, from small speakers for a bedroom to more powerful ones for a living room. Customers buy these to start or expand their home audio system. This category also includes portable, battery-powered speakers that can be used both at home over Wi-Fi and on the go using Bluetooth.
Sonos Home Theater
A significant part of the business comes from products that upgrade the sound of your television. This includes soundbars, which are long, thin speakers that sit in front of your TV to provide clearer and more immersive audio than the TV's built-in speakers. Customers can also add wireless subwoofers for more powerful bass and pairs of smaller speakers as rear surrounds for a true home cinema experience. This modular approach allows people to build a home theater system over time.
Components and Accessories
This smaller category includes products that connect other audio equipment to the Sonos ecosystem. For example, the Sonos Port can plug into a traditional stereo receiver, allowing it to stream music and be part of the whole-home system. The Sonos Amp does the same but also has a built-in amplifier (a device that powers traditional, non-wireless speakers). The company also sells accessories like speaker stands, wall mounts, and cables.
What management is betting on now
The company's current strategy focuses on encouraging existing customers to add more Sonos products to their homes. Management sees a large opportunity in increasing the number of devices per household and converting homes with a single speaker into multi-room systems. After a challenging period that included a widely criticized app update, the new leadership is also prioritizing improvements to its software to ensure the system is reliable and easy to use. Finally, Sonos is looking to expand into new product categories, as seen with its recent launch of headphones, to reach customers beyond the home.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$-92.98M
FY2025 Q1
$143.07M
FY2025 Q2
$-65.22M
FY2025 Q3
$32.69M
FY2025 Q4
$-25.75M
FY2026 Q1
$157.35M
FY2026 Q2
$-70.15M
FY2026 Q3
$40.29M
Revenue
$375.26M
Net income
$29.85M
Diluted EPS
0.25
Operating cash flow
$46.23M
Free cash flow
$40.29M
Fetching…
Sources
Revenue
$281.53M
Net income
$-28.89M
Diluted EPS
-0.24
Operating cash flow
$-65.37M
Free cash flow
$-70.15M
Fetching…
Sources
Revenue
$545.66M
Net income
$93.80M
Diluted EPS
0.75
Operating cash flow
$163.31M
Free cash flow
$157.35M
Fetching…
Sources
Revenue
$287.90M
Net income
$-37.86M
Diluted EPS
-0.30
Operating cash flow
$2.92M
Free cash flow
$-25.75M
Fetching…
Sources
Revenue
$344.76M
Net income
$-3.38M
Diluted EPS
-0.03
Operating cash flow
$37.44M
Free cash flow
$32.69M
Fetching…
Sources
Revenue
$259.76M
Net income
$-70.14M
Diluted EPS
-0.58
Operating cash flow
$-59.67M
Free cash flow
$-65.22M
Fetching…
Sources
Revenue
$550.86M
Net income
$50.24M
Diluted EPS
0.40
Operating cash flow
$156.17M
Free cash flow
$143.07M
Fetching…
Sources
Revenue
$255.38M
Net income
$-53.09M
Diluted EPS
-0.42
Operating cash flow
$-37.73M
Free cash flow
$-92.98M
Fetching…
Sources
Is it cheap or expensive?
Fair value $15.99 vs current price $15.84
Wall Street consensus is the average analyst price target: $18.62 (16.5% higher than our fair-value estimate).
Our most-likely fair value is $15.99 a share — about 1.0% away from today's price of $15.84, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $204.2M - more cash than debt. Interest coverage -70.9x.
Net debt
$-204.20M
Interest coverage
-70.87x
Sonos, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
SONO
BASELINE
Sonos, Inc.
Total debt $56.82M Interest coverage -70.87x This is the baseline the peer rows are being compared against.
Total debt $84.39M Interest coverage 16.27x This peer still has a real interest-payment cushion, while SONO does not.
Total debt $86.05M Interest coverage -7.35x Neither company has much profit cushion over interest right now.
Total debt $84.34B Interest coverage 33.83x This peer still has a real interest-payment cushion, while SONO does not.
Total debt $12.05B Interest coverage 43.67x This peer still has a real interest-payment cushion, while SONO does not.
What you should know
The case for and against SONO
3 Rewards
2 Risks
Rewards
-
Revenue grew 3.3% last year.
-
Returns 14.2% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 7/10 years.
Risks
-
Stock trades 24.1% above its 5-year average P/E.
-
Operating margin compressed from 5.1% to 4.4% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
35.20x
Forward P/E
12.14x
P/B
4.64x
P/S
1.26x
EV/EBITDA
14.80x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
45.0%
Operating margin
4.4%
Net margin
3.8%
ROE
14.2%
ROA
4.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.14x
Current ratio
1.61x
Quick ratio
1.03x
Total debt
$56.82M
Total cash
$261.03M
Growth
How the business has been compounding
Revenue TTM
$1.49B
Revenue 5Y CAGR
-4.2%
EPS TTM
0.45
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$147.09M
Free CF TTM
$108.19M
FCF margin
7.3%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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