Critical Survey: Sonos (SONO) vs. Its Rivals

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

Institutional and Insider 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 insiders. Comparatively, 18.5% of shares of all “Household Durables” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

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

Valuation & Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Sonos	$1.44 billion	-$61.14 million	33.98
Sonos Competitors	$5.32 billion	$322.40 million	14.60

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

Profitability

This table compares Sonos and its peers’ 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	-21.29%	-17.54%	1.12%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Sonos and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonos	0	3	2	0	2.40
Sonos Competitors	1734	7280	8056	301	2.40

Sonos currently has a consensus price target of $20.00, suggesting a potential upside of 30.80%. As a group, “Household Durables” companies have a potential upside of 45.46%. Given Sonos’ peers higher possible upside, analysts clearly believe Sonos has less favorable growth aspects than its peers.

Summary

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

About Sonos

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.