Sonos Reports Profit and Boosts Outlook; Stock Jumps 7.43%

Sonos (SONO) reported Fiscal 2021 second-quarter results that showed a huge improvement from a year ago. It also raised its full-year outlook again. The stock soared 7.43% on Thursday to close at $33.83.

The company primarily makes speakers and sells other home entertainment products. It has been in business since 2002. 

Revenue came in at $332.9 million, up 90% year-over-year. The amount was also 30% higher than the consensus estimate. The company said the demand for its products has been strong, even exceeding its own expectations. It made a profit of $17.2 million, marking a huge improvement from a loss of $52.3 million a year ago.

“The power of our model is that customers can start with one product and expand to more over time,” commented Sonos CEO Patrick Spence.

The company still sees a massive growth opportunity ahead. For example, it says that it has only captured about 9% of the $18 billion market for premium home audio products. Its share of the $89 billion global audio market is even smaller still. Sonos says it will continue to focus on expanding its brand and product portfolio while improving operational efficiency.

The company boosted its full-year revenue guidance again to a range of $1.63 billion – $1.68 billion. The previous revenue guidance was for $1.53 billion – $1.58 billion, which had been hiked from the $1.44 billion – $1.5 billion range initially. (See Sonos stock analysis on TipRanks)

Raymond James analyst Adam Tindle reiterated a Buy rating on Sonos stock on the back of the solid earnings results, but the analyst didn’t assign it a price target.

“Strong F2Q as work from home tailwind remains; await better tactical entry,” noted Tindle.

Consensus among analysts on Wall Street is a Moderate Buy based on 2 Buy and 2 Hold ratings. The average analyst price target of $44.67 implies 32.04% upside potential to the current price.

SONO scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating the stock is likely to outperform the market.

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