Sonos earnings: what to look for from SONO

Audio technology Sonos company (NASDAQ:SONO) will be reporting earnings this Tuesday after market close. Here’s what investors should know.

Sonos beat analysts’ revenue expectations last quarter, reporting revenues of $375.3 million, up 8.8% year on year. It was a very strong quarter for the company, with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Is Sonos a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, the market is expecting Sonos’s revenue to grow 18.2% year on year, improving from the 12.7% increase it recorded in the same quarter last year.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Sonos has a history of exceeding Wall Street’s expectations.

Looking at Sonos’s peers in the consumer discretionary segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Apple delivered year-on-year revenue growth of 11.7%, beating analysts’ expectations by 0.8%, and Peloton reported revenues up 1.5%, topping estimates by 1.2%. Apple traded down 1.9% following the results while Peloton was up 2.9%.

Read our full analysis of Apple’s results here and Peloton’s results here.

There has been positive sentiment among investors in the consumer discretionary segment, with share prices up 4.7% on average over the last month. Sonos is down 5.4% during the same time and is heading into earnings with an average analyst price target of $18.63 (compared to the current share price of $16.41).

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