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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Sonos, Inc. (XNAS:SONO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SONO
Name:
SONOS, INC. (XNAS:SONO)
Sector:
173.58M
Industry:
Consumer Electronics
CEO:
Mr. Patrick Spence
Total Employees:
1,525
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -80.25% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SONOS, INC.(SONO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CONSUMER ELECTRONICS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
14.83
One Month Price Target:
$15.
Six Month Price Target :
$15.82
Likely Price in One Year's Time:
Ticker:
$16.82
Likely Trading Range Today Under (Normal Volatility)
$14.74
Price Upper limit ($) :
$14.94
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$13.64
This week:
$12.16
This month :
$9.49
Other Primary facts
Market Cap:
1.88B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
127.25M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
29.84%
-24.95%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$20.37
$17.82
$9.29
$11.84
Medium risk (<10%) entry points
Buy Call
Sell Call
$16.99
Buy Put:
Sell Put:
$16.45
$12.66
$13.21
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SONO
Sharpe Ratio:
2.08%
Comparison:
SONO, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 10.97% higher than the industry
& is -8.94% lower than the market/S&P 500 average
Average Returns/Yield of
SONO
Daily returns:
0.09%
Weekly returns:
0.46%
Monthly returns:
1.82%
Yearly returns:
16.65%
Comparison of returns:
Average annual returns/yield (last 3 years) is 31.34% above industry average
Classification:
SONO, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.85
Statistical test of Returns:
SONO has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.96%
Weekly Volatility:
8.86%
Monthly Volatility:
17.72%
Yearly Volatility:
61.39%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.17%
Volatility in last five trading days has been -95.61% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.05%
Weekly VaR:
-17.99%
Monthly VaR:
-35.99%
How Much Can the price of
SONO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-31%
Worst case (decline):
>85%
This translates to price declining to:
$10.27
This translates to price declining to:
$2.22
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SONO is a 154.01% riskier investment compared to the market/S&P 500 & is 117.61% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 18.16% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SONO
Beta in relation to market/S&P 500--1.99
Expected beta in 1 year's time:
1.129
Expected beta in 3 year's time:
1.597
Unlevered (debt free) Beta:
1.82
Beta in relation to Nasdaq (XNAS):
1.056
Beta in relation to all global stocks::
0.541
Beta Comparison & Analysis
Beta of competitors/peers::
1.206
Beta is 65.31% higher than peers
Average Industry Beta:
1.372
Beta is 45.30% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
24.81%
Sustainable growth rate is -60.70% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.051
Alpha is 23.43% above industry average alpha yield
Alpha is 322% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SONO
Equity cost of capital:
0.168
Equity cost of capital is 33.93% above industry mean WACC
Unlevered (without debt) cost of capital:
15.35%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$14.16
Revenue growth rate per share of (3Y):
2.78
Annual revenue growth rate is -409.47% below industry average
EPS:
$0.98
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.93
-
-
Debt per share
$0.52
EBITDA per share
$1.41
Valuation Analysis Today of
SONO
P/E Ratio:
22.11
P/E Ratio of Competitors/Peers:
938.75
P/E ratio is -97.64% lower than main peers & is 35.61% higher than the industry
Stock price/value with industry average P/E ratio: $15.98
SONO is -7.21% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.05
Price to sales ratio is -61.47% below the industry mean
P/B (Price to book value ratio):
2.78
Price to free cash flow: 15.94
-
Net income growth rate (3Y):
-646.30%
Net income growth rate is 153.67% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
9.66%
Net debt to equity ratio:
-111.01%
Debt to assets ratio:
4.78%
Net debt to assets ratio:
-54.96%
Debt-to-asset ratio is -91.51% below industry average
Ability to repay debt:
Interest coverage ratio:
1322.35
Interest coverage ratio is 4867.15% more than industry average
Looking forward:
Debt growth rate:
-48.16%
Annual debt growth is -317% lower than industry average debt growth rate
Debt repayment rate in last quarter: 1.40%
Analysis of Key Statistics
Correlation of price movement with the market:
0.422
Statistical significance of correlation:
SONO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.532
Stock price is -20.76% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.532
Correlation of price movement with Nasdaq (^IXIC):
-0.031
Covariance of price movement with the market:
-0.071
Kurtosis
9.492
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.526
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
SONO
Gross Profit Margin Ratio:
186%
Operating Profit Margin Ratio:
8.20%
Operating profit margin is -53.83% lower than the industry
Net Profit Margin Ratio:
186%
Effective Tax Rate:
1.83%
Effective tax rate is -90.84% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.77%
Return on equity (ROE) is -69.68% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.28%
Return on assets (ROA) is -42.39% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
1.94
Current ratio is 23.22% above industry average
Cash Conversion Cycle (days):
-79.4
Cash conversion cycle is -173.27% below industry average
The remaining useful life of property plant & equipment is: 1.5 years
Stock based compensation to net income ratio:
12.37%
In-depth Efficiency Analysis
Revenue generated per employee:
1.2M
Each employee generates -12% less revenue than industry average revenue per employee
EBITDA generated per employee:
117.9K
Each employee generates -59% less EBITDA than industry average revenue per employee
Profit generated per employee:
92.5K
Each employee generates -71% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
113.8K
Each employee generates 52% more free cash flow than industry average revenue per employee
Assets/Capital per employee
139.3K
Each employee generates 52% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 7.18%
Growth rate in R&D investment/expenditure is 13.83% higher than the industry
Competitors/Peer firms of
SONO
APPFOLIO, INC. (XNAS:APPF)
ACI WORLDWIDE, INC. (XNAS:ACIW)
AVNET, INC. (XNAS:AVT)
Novanta Inc. (XNAS:NOVT)
SYNAPTICS INCORPORATED (XNAS:SYNA)
FEYE
ALLEGRO MICROSYSTEMS, INC (XNAS:ALGM)
CYBERARK SOFTWARE LTD. (XNAS:CYBR)
EVERBRIDGE, INC. (XNAS:EVBG)
Current Analyst Ratings
Strong buy�0%
Buy�13%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
1.80B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
961.26M
841.21M
247.64M
161.59M
445.75M
284.16M
-
693.39M
222.00K
136.00K
35.95M
179.84M
147.82M
141.13M
143.76M
2.63M
141.13M
Statement of Cash Flow
Date:
Period:
9.22M
Differed Income Tax :
14.00K
Stock Based Compensation :
17.46M
Change in Working Capital :
28.13M
Accounts Receivables:
- 79000.00K
Other Working Capital:
- 62604.00K
Other Non-Cash Items:
1.63M
Net Cash Provided by Operating Activities:
179.93M
Investments in PP&E:
- 6355.00K
Net Acquisitions:
- 27101.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/1/22
2022
Q1
754.42M
-
754.42M
178.26M
205.16M
22.53M
1.16B
102.77M
37.73M
29.86M
-
9.89M
32.12M
212.38M
-
1.37B
341.34M
-
-
17.82M
240.10M
599.26M
65.63M
- 31909.00K
93.87M
-
693.14M
130.00K
53.58M
- 1736.0K
627.63M
January 1, 2022 at 7:00:00 AM
1.65B
679.61M
1.37B
-
-
- 754417.0K
-
-
- 33456.00K
- 929.00K
13.23M
- 31365.00K
-
- 11882.00K
- 30944.00K
- 1218.00K
114.32M
754.42M
640.10M
179.93M
- 6355.00K
173.58M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
SONO
2023
2024
2025
2026
2027
$16.90
$278.86
$316.20
$358.55
$406.57