Sonos (SONO) & Its Rivals Critical Analysis

Sonos (NASDAQ:SONO) is one of 149 public companies in the “Household Durables” industry, but how does it contrast to its competitors? We will compare Sonos to related companies based on the strength of its risk, valuation, analyst recommendations, profitability, dividends, institutional ownership and earnings.

Volatility & Risk

Sonos has a beta of 1.93, suggesting that its stock price is 93% more volatile than the S&P 500. Comparatively, Sonos’ competitors have a beta of 1.75, suggesting that their average stock price is 75% more volatile than the S&P 500.

Insider & Institutional Ownership

85.8% of Sonos shares are held by institutional investors. Comparatively, 53.7% of shares of all “Household Durables” companies are held by institutional investors. 1.3% of Sonos shares are held by company insiders. Comparatively, 18.5% of shares of all “Household Durables” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Sonos and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sonos	3.82%	19.10%	8.67%
Sonos Competitors	-21.25%	-17.56%	1.15%

Analyst Ratings

This is a breakdown of recent recommendations for Sonos and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonos	0	3	2	0	2.40
Sonos Competitors	1750	7300	8071	306	2.40

Sonos presently has a consensus price target of $20.00, indicating a potential upside of 32.28%. As a group, “Household Durables” companies have a potential upside of 56.39%. Given Sonos’ competitors higher probable upside, analysts plainly believe Sonos has less favorable growth aspects than its competitors.

Earnings & Valuation

This table compares Sonos and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Sonos	$1.44 billion	-$61.14 million	33.60
Sonos Competitors	$5.32 billion	$322.40 million	9.53

Sonos’ competitors have higher revenue and earnings than Sonos. Sonos is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

Sonos beats its competitors on 7 of the 13 factors compared.

Sonos Company Profile

Sonos, Inc., together with its subsidiaries, designs, develops, manufactures, and sells audio products and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers wireless, portable, and home theater speakers; components; and accessories. The company offers its products through approximately 10,000 third-party retail stores, including custom installers of home audio systems; and e-commerce retailers, as well as through its website. The company was formerly known as Rincon Audio, Inc. and changed its name to Sonos, Inc. in May 2004. Sonos, Inc. was incorporated in 2002 and is headquartered in Santa Barbara, California.