Financial Review: Sonos (SONO) & Its Rivals

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

Institutional and Insider Ownership

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

Valuation & Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Sonos	$1.49 billion	-$61.14 million	34.00
Sonos Competitors	$5.28 billion	$322.40 million	13.82

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.

Risk & Volatility

Sonos has a beta of 1.95, indicating that its share price is 95% more volatile than the S&P 500. Comparatively, Sonos’ competitors have a beta of 1.74, indicating that their average share price is 74% more volatile than the S&P 500.

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	-21.22%	-17.51%	1.14%

Analyst Recommendations

This is a summary of current ratings and target prices for Sonos and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonos	0	3	2	0	2.40
Sonos Competitors	1736	7281	8058	303	2.40

Sonos currently has a consensus price target of $20.00, suggesting a potential upside of 30.72%. As a group, “Household Durables” companies have a potential upside of 46.39%. Given Sonos’ competitors higher probable upside, analysts clearly believe Sonos has less favorable growth aspects than its competitors.

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.