JMP downgrades Sonder on delayed timeline to positive cash flow

JMP Securities analyst Nicholas Jones last night downgraded Sonder Holdings to Market Perform from Outperform without a price target. The analyst cites a lack of visibility into the company’s business amid macro headwinds, a longer timeline to achieving positive free cash flow than originally expected, and ongoing risk that it breaches its debt covenants for the downgrade. The firm continues to see a “notable opportunity” for Sonder’s accommodation offering within corporate and leisure travel, but believes that there is limited upside in its share price over the next twelve months, particularly given the uncertainty as to when the company will achieve positive free cash flow, which it views as the key driver to get the stock working.