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Sonos Spikes as Strong Results Spark Price Target Upgrades

Shares of Sonos jumped on price target upgrades by analysts after the maker of smart speakers reported fiscal first-quarter earnings and guidance that beat estimates.

Shares of Sonos  (SONO) - Get Sonos Inc. Report surged Thursday after the maker of smart speakers and other audio equipment posted better-than-expected fiscal first-quarter earnings and guidance that sparked a flurry of price target upgrades by analysts.

Shares of the Santa Barbara, Calif., company at last check were rising 13.62% to $35.79.

After the market close on Wednesday, Sonos reported adjusted earnings of $1.17 per share, above the $0.98 FactSet consensus. Revenue rose 14.8% to $645.6 million from $562 million in the year-ago period. Analysts at FactSet had projected a revenue target of $590 million.

Analysts at Jefferies raised their price target on Hold-rated Sonos to $37 from $25. "The results showed strong revenue growth even in the face of continued supply-chain challenges, and the guidance implies the fastest revenue growth in the company’s history as a public company," Jefferies said, as quoted in Bloomberg.

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“Fundamentals of the business are as strong as ever,” and the report “should fuel the bull case," Jefferies added.

Sonos raised its revenue outlook for fiscal 2021 to between $1.525 billion to $1.575 billion, up from the $1.4 billion to $1.5 billion it had forecast earlier. 

The company also upped its adjusted earnings before interest, taxes, depreciation and amortization outlook for fiscal 2021 to between $195 million to $225 million, from $170 million to $205 million projected earlier.

Morgan Stanley said results topped "even heightened expectations" and raised its price target to $45 from $35. "Sonos should see stronger momentum throughout 2021 as constraints ease and retail stores reopen," the company said.

Analysts at D.A. Davidson raised their price target on Buy-rated Sonos to $45 from $24. The firm is “encouraged by the impressive demand and the willingness of customers to wait for their products.”