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Sonos Stock Higher After Swing to Profit Resounds With Analysts

Sonos shares rose after the producer of high-end speakers reported stronger-than-expected results, triggering praise from analysts.

Sonos  (SONO) - Get Sonos, Inc. Report shares rose Thursday after the producer of high-end speakers reported stronger-than-expected results for its fiscal third quarter, triggering a positive reaction from analysts.

For the quarter ended July 3, the Santa Barbara, Calif., company earned 12 cents a share, compared with a loss of 52 cents a share in the year-earlier quarter. The latest adjusted earnings were 27 cents a share.

Shares outstanding climbed 32% to 144.2 million.

Revenue reached $378.7 million from $249.3 million.

A survey of analysts by FactSet produced consensus estimates of a GAAP loss of 17 cents a share, or an adjusted loss of 6 cents a share, on revenue of $315.2 million.

The shares have tripled off their 52-week low of $12.40, set in early September. The 52-week high is $44.72, set in mid-April.

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For fiscal 2021 Sonos expects revenue to range $1.7 billion to $1.71 billion, or growth of 28% to 29% from a year earlier.

The FactSet survey produced a consensus estimate of $1.67 billion for the year.

And the company expects gross margin to widen 3.4 to 3.8 percentage points from a year earlier, to a range of 46.5% to 46.9%.

As for the analysts, Morgan Stanley analyst Katy Huberty lifted her price target to $51 from $47, keeping her overweight rating.

Raymond James analyst Adam Tindle has a market-perform rating for Sonos. He boosted his projection for 2021 earnings per share to $1.80 from $1.51.

Speaker sales sparked the third-quarter results, Tindle wrote in a commentary cited by Bloomberg.

A shift to premium products and accelerating growth in direct-to-consumer sales also helped, he said. To be sure, supply-chain interruption partly offset the rise in profit margin. Third-quarter gross margin widened three percentage points to 47%.