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Sonos

Sonos shares surged as much as 20% in after trading hours on Wednesday after the developer and manufacturer of audio products reported better-than-expected earnings in the fiscal second quarter and lifted its full-year 2021 revenue outlook.

The Santa Barbara-based company reported earnings per share of $0.12 in the quarter ended April 3, 2021, beating the market expectations for a loss of $0.22 per share. The company said its sales surged 90% to $333 million, topping Wall Street’s consensus estimates of $248.5 million.

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The Company, which offers wireless speakers, home theatre speakers, and other home audio components, lifted its fiscal 2021 revenue guidance in the range of $1.63 billion to $1.68 billion, up from the previous projection of $1.525 billion to $1.575 billion.

Following this, Sonos shares surged as much as 20% to $37.74 in after trading hours on Wednesday.

Analyst Comments

“F2Q earnings reflects a platform narrative that continues to strengthen with demand showing signs of sustainability, consistent execution, and improving earnings linearity, all which support a premium valuation in-line with other high-quality consumer HW peers,” noted Katy Huberty, equity analyst at Morgan Stanley.

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Sonos Stock Price Forecast

Four analysts who offered stock ratings for Sonos in the last three months forecast the average price in 12 months of $44.00 with a high forecast of $47.00 and a low forecast of $40.00.

The average price target represents a 39.73% increase from the last price of $31.49. Of those four analysts, two rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley raised the base target price to $47 from $45 with a high of $66 under a bull scenario and $28 under the worst-case scenario. The firm gave an “Overweight” rating on the audio products manufacturer’s stock.

“We raise our FY21 revenue 7% to $1.67 billion, or 26% Y/Y growth, and raise EPS 18% to $0.79. We roll forward to FY22 revenue which combined with a higher share count and lower peer valuation multiples translates to a $47 price target, up from $45 previously,” Morgan Stanley’s Huberty added.

“Given the recent pullback in Sonos‘ share price we’d be aggressive buyers of the dip and look to F3Q earnings in early August and the August 13th ITC decision on Sonos‘ patent infringement case against Google as the next major stock catalysts.”

Several other analysts have also updated their stock outlook. Jefferies lowered the target price to $40 from $42. BofA Global Research lifted the price objective to $47 from $45. Stifel increased the target price to $40 from $34. D.A. Davidson upped the target price to $45 from $24.

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