Sonos gains 7% on solid Q3 results; analysts flag 'conservative' guidance By Investing.com

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Sonos gains 7% on solid Q3 results; analysts flag 'conservative' guidance

Published Aug 09, 2023 04:22PM ET Updated Aug 10, 2023 06:51AM ET

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Sonos (NASDAQ:SONO), the leading smart speaker manufacturer, shares rose 7.5% in pre-market Thursday trading after the company’s Q3 earnings topped analyst expectations.

Sonos reported a surprising profit per share of 16 cents, which is better than the estimated loss per share of 16 cents. The company’s revenue for the quarter reached $373.4 million, exceeding the estimate of $334.3M.

The company also revised its forecast for the full year. The new projection indicates that the company expects to generate between $1.64 billion and $1.66B in revenue. This compares to the previous forecast of $1.63B to $1.68B.

The company now anticipates generating between $148M and $158M in adjusted EBITDA, compared to the previous estimate of $138M to $168M.

“We remain on track to deliver against our fiscal 2023 guidance,” the company said.

Morgan Stanley analysts said the company's Q4 guidance looks conservative, which may suggest the management wanted to de-risk the setup.

"SONO beat our F3Q rev by 10% but didn't flow the beat through to FY23 guidance, as promos pulled fwd demand into F3Q and int'l demand weakened. This suggests the spending environment remains uneven, although we also believe there is conservatism embedded in F4Q guide," said analysts.

BofA analysts cut the price target by $3 to $23 per share, but remain Buy-rated on SONO stock as the company "continues to take share."

"SONO’s Era 100 and Era 300 products continue to perform well despite the difficult macro backdrop," they wrote.

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