Sonos Inc (NASDAQ: SONO)

Sector: Technology Industry: Consumer Electronics CIK: 0001314727
P/B 6.42
P/E -37.29
P/S 1.58
Market Cap 2.28 Bn
ROIC (Qtr) -12.90
Div Yield % 0.00
Rev 1y % (Qtr) 12.73
Total Debt (Qtr) 53.29 Mn
Debt/Equity (Qtr) 0.15

About

Sonos Inc, with its ticker symbol SONO, operates in the audio equipment industry, where it has revolutionized the way people listen to music and other audio content. The company was established in 2

Stock Price Chart

Analysis

Pros

  • Strong operating cash flow of 136.87M provides robust 2.57x coverage of total debt 53.29M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 665.07M provides 12.48x coverage of total debt 53.29M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 136.87M provides exceptional 294.34x coverage of interest expenses 465000, showing strong debt service capability.
  • Robust free cash flow of 108.19M exceeds capital expenditure of 28.68M by 3.77x, indicating strong organic growth funding capability.
  • Tangible assets of 665.07M provide exceptional 8.19x coverage of deferred revenue 81.22M, showing strong service capability backing.

Cons

  • Operating cash flow of 136.87M barely covers its investment activities of (29.52M), with a coverage ratio of -4.64, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (29.52M) provide weak support for R&D spending of 279.97M, which is -0.11x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 136.87M shows concerning coverage of stock compensation expenses of 81.56M, with a 1.68 ratio indicating potential earnings quality issues.
  • Operating earnings of (50.03M) show weak coverage of depreciation charges of 62.32M, with a -0.80 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 62.32M relative to operating cash flow of 136.87M, which is 0.46x suggests significant maintenance capital requirements affecting free cash flow.

Peer Comparison

Companies in the Consumer Electronics
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AAPL Apple Inc. 4,169.05 Bn 37.22 10.02 98.66 Bn
2 SONY Sony Group Corp 162.78 Bn 20.79 1.91 13.01 Bn
3 SONO Sonos Inc 2.28 Bn -37.29 1.58 0.05 Bn
4 LPL LG Display Co., Ltd. 2.27 Bn -17.49 0.12 9.69 Bn
5 ZEPP Zepp Health Corp 0.47 Bn -7.16 2.03 0.21 Bn
6 TBCH Turtle Beach Corp 0.29 Bn 15.92 0.84 0.09 Bn
7 GPRO GoPro, Inc. 0.28 Bn -2.32 0.43 0.20 Bn
8 VUZI Vuzix Corp 0.24 Bn -6.54 46.00 0.00 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 2.59 1.62
EV to Cash from Ops. 15.59 6.45
EV to Debt 40.05 200.47
EV to EBIT -42.66 -28.79
EV to EBITDA 180.05 6.30
EV to Free Cash Flow [EV/FCF] 19.73 44.66
EV to Market Cap 0.94 1.96
EV to Revenue 1.48 3.73
Price to Book Value [P/B] 6.42 4.94
Price to Earnings [P/E] -37.29 -24.97

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 -85.09
Dividend Payout Ratio % 0.00 1.06
Dividend per Basic Share 0.00 0.06
FCF Dividend Payout Ratio % 0.00 0.86
Interest Coverage -107.60 -24.02

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 48.09 -25,923.54
Cash and Equivalents Growth (1y) % 2.91 21.58
Dividend Growth (1y) % 0.00 -3.99
EBIAT Growth (1y) % -61.44 -636.78
EBITDA Growth (1y) % 173.61 -136.04
EBIT Growth (1y) % -87.32 392.34
EBT Growth (1y) % -85.99 -2.62
EPS Growth (1y) % -64.52 -36.64
FCF Growth (1y) % -19.65 -2,257.13
Gross Profit Growth (1y) % -8.54 63.03

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 1.75 0.77
Cash Payout Ratio 0.00 0.01
Cash Ratio 0.50 0.79
Current Ratio 1.43 3.15
Debt to Equity Ratio 0.15 3.74
Interest Cover Ratio -107.60 -24.02
Times Interest Earned -107.60 -24.02

Profitability

Metric Value Industry Percentile
EBITDA Margin % 0.90 -156.03
EBIT Margin % -3.47 395.52
EBT Margin % -3.50 -168.00
Gross Margin % 43.70 19.60
Net Profit Margin % -4.20 -169.24