SONO Stock Price Increases 29.84%: Why It Happened 

By Amit Chowdhry ● November 20, 2020

– The stock price of Sonos Inc (NASDAQ: SONO) has surged 29.84%. This is why it happened.

The stock price of Sonos Inc (NASDAQ: SONO) increased from $17.09 to $22.19 (+29.84%) on Thursday, November 19. There are a few reasons why the stock price jumped. 

Q4 2020 Results

Sonos Inc (NASDAQ: SONO)  had reported its Q4 2020 results on Wednesday evening. And the company substantially beat its sales and profit forecasts for Q4 2020. Plus the company delivered upbeat guidance for the new fiscal year.

During the COVID-19 pandemic, people have been spending more time in their homes and so they have been buying more consumer electronics including speakers.

In an interview with Yahoo Finance Live, Sonos CEO Patrick Spence said that the behavior changes have brought the company to a key inflection point. 

“We have hit an inflection point and also an inflection point with profitability,” said Spence in the interview.

Net sales for the company increased 16% year-over-year to $339.8 million compared to estimates being below $300 million. And Adjusted EBITDA was $46.4 million compared to a $2.7 million loss last year. The adjusted Diluted EPS were 33 cents a share compared to estimates being about 15 cents a share.

In terms of the full-year guidance, Sonos is expecting $1.44 billion to $1.5 billion, up about 11% to 15%. And adjusted EBITDA is expected to be about $170 million to $205 million, up 57% to 89%.

Price Target Increases

Sonos received some price target increases following the Q4 2020 results. Morgan Stanley analyst Erik Woodring increased the price target from $20 to $30 and maintained an Overweight rating on the company shares. And DA Davidson analyst Tom Forte increased the price target from $16 to $24 with a “Buy” rating being maintained.

Forte had cited the operating performance in September and promising results around the launch of the Sonos Radio HD service.