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.
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Shares of Sonos  (SONO) - Get 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.

“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.”

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