Citron cited Sonos’s strength in the stay-at-home environment created by the coronavirus pandemic.
“Sitting at the intersection of stay at home, streaming wars, and the connected home, Sonos has quickly emerged as the leader of sound in the connected home,” Citron said in a commentary.
The Santa Barbara, Calif., company's enterprise value of $1 billion pales in comparison to the speculative stocks that have attracted retail traders recently, Citron said.
“Through a suite of products that are flying off the shelves, Sonos is beating Amazon (AMZN) - Get Report, Google (GOOGL) - Get Report and Apple (AAPL) - Get Report at their own game by dominating the connected-home-speaker category,” the research firm said.
“The Sonos megagrowth story is happening in real time, with Sonos set to report a blowout quarter.” Sonos is likely to report earnings in early August.
Sonos is the Apple of home audio, Citron said. “From when you open the box, the similarities between Sonos and Apple are uncanny.”
And “Sonos is not a commodity business. Saying that Sonos just sells speakers shows a lack of understanding of the software platform behind the product,” the report stated.
“With attention to design and quality, Sonos has created a sticky platform. Existing households represent 37% of new-product registrations, with the average home carrying 2.9 Sonos products.”
Sonos shares recently traded at $13.97, up 17%. The stock has jumped 67% in the past three months, compared with 35% for the S&P 500 index.