Sonos Inc. (SONO) delivered better-than-expected Fiscal Q1 2022 results characterized by record-setting revenue and strong adjusted EBITDA margins. Revenue and earnings topped estimates amid chip shortages that constrained supply. The company also issued a solid full-year outlook affirming expected growth. SONO shares rose 0.23% to close at $26.65 on February 9.
Sonos offers smart wireless home sound systems. Its solutions support streaming services worldwide and offer access to music, internet radio, and podcasts.
Sonos Earnings
Revenue in the quarter was up 3% year-over-year to record-highs of $664.5 million, topping the consensus estimate of $641.01 million. Adjusted EBITDA declined to $163.1 million compared to $166.3 million delivered in the same quarter last year. Non-GAAP diluted earnings per share dropped to $1.02 from $1.17 in the same quarter last year but came in better than analyst estimates of $0.92.
Sonos expects full-year revenue to range between $1.95 billion and $2 billion, representing 14% to 16% growth. Adjusted EBITDA is expected to range between $290 million and $325 million, with an adjusted EBITDA margin in the range of 14.9% to 16.2%.
Stock Rating
Last week, Morgan Stanley analyst Kathryn Huberty reiterated a Buy rating on the stock and lowered the price target to $45 from $49, implying 68.86% upside potential to current levels. According to the analyst, the stock has underperformed its peers due to COVID-19 disruptions.
Consensus among analysts is a Strong Buy based on 3 Buys. The average Sonos price target of $47.33 implies 77.60% upside potential to current levels.
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