Sonos, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Sonos is showing a credible operational inflection — Q3 FY2026 revenue grew 8.8% YoY to $375.3M with EPS of $0.27 versus a $0.04 estimate, and the September 2026 product launches (Sonos 27 OS, Beam Ultra, Ace Ultra) add near-term catalysts.
However, the stock has rallied to $18.18 with an RSI of 69, trading above both its 50-day ($15.68) and 200-day ($15.30) moving averages, leaving little room for error after the run. The company remains loss-making on a full-year basis (FY2025 operating income of -$50.5M, net income of -$61.1M) with gross margin compressing from 47.2% in FY2021 to 43.7% in FY2025, so the turnaround needs more quarters of proof before chasing at these levels.
What could go wrong
- Margin compression persists. Gross margin has declined from 47.2% in FY2021 to 43.7% in FY2025, and the company has posted three consecutive years of operating losses; if new product launches fail to lift margins, the profitability turnaround stalls.
- Technically overbought. RSI of 69 with the stock at $18.18 above both MA50 ($15.68) and MA200 ($15.30) increases vulnerability to a pullback on any disappointment.
- Annual losses continue. Despite positive quarterly operating income in Q1 and Q3 FY2026, FY2025 net income was -$61.1M and EPS was -$0.51; a single weak holiday quarter could push the full year back into the red.
- Competitive pressure in consumer electronics. The peer set trades at a median P/S of 4.53 while SONO sits at 1.42, reflecting market skepticism about its competitive moat; if new products underperform, the valuation discount could widen further.
What would change my mind
Where this comes from: results, quarter to 27 Jun · earnings vs estimates, 29 Jul · fundamentals, year to 27 Sep 2025 · FY21 and FY25 fundamentals. Orin's read on SONO; not advice.
How has the share price moved?
Up 1.4% over twelve months, from $17.62 on 27 Oct 2025 to $17.87 at the Tue 27 Oct 2026 close. Its highest close in that time was $19.16 on 9 Dec 2025; the last close is 6.7% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 7.3M, on 4 Feb 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All SONO filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $248.1M | 0.0% |
| Coliseum Capital Management | $244.5M | 21.0% |
| Vanguard Portfolio Management | $124.3M | 0.0% |
| Vanguard Capital Management | $69.7M | 0.0% |
| State Street | $64.8M | 0.0% |
| Geode Capital Management | $42.6M | 0.0% |
| Morgan Stanley | $32.9M | 0.0% |
| FMR | $29.0M | 0.0% |
| Charles Schwab Investment Management | $26.4M | 0.0% |
| AQR Capital Management | $19.8M | 0.0% |
62 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 235 Form 4 filings; open-market trades net $79.8M. Of the 50 on hand, 7 were open-market purchases and 5 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about SONO
Orin answers questions about SONO from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
It lost money over the last 12 months, so it has no P/E (Tue 27 Oct close). It is priced at 1.42× its yearly sales — above its usual level (1.01×).
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | lost money | 25.5× | 46.1× |
| P/S | 1.42×above usual | 1.01× | — |
| EV/EBITDA | 16.8× | — | — |
| P/B | 5.3×above usual | 3.5× | — |
- P/E: lost money — no P/E over the last 12 months.
- EV/EBITDA: no usual level — it ran from 14.3× to 141× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $19 (from $18 to $21) — 6% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$19
$18 – $21 · +6% against the last close
- 2 buy or overweight
- 1 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
It lost money over the last 12 months, so it has no P/E; the middle P/E of the 3 companies it is compared to that made a profit is 40.6×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| SONOSonos, Inc. | $2B | lost money | 16.8× | 46.5% | −2.5% | −10% |
| AAOIApplied Optoelectronics, Inc. | $4B | lost money | n/m | 28.8% | −4.4% | −2% |
| BELFBBel Fuse Inc. | $3B | 55.9× | 19.1× | 39.5% | 8.1% | 11% |
| KNKnowles Corporation | $3B | 40.6× | 22.0× | 42.6% | 10.8% | 9% |
| VSHVishay Intertechnology, Inc. | $3B | 31.6× | 6.4× | 22.2% | 2.4% | 4% |
- AAOI: lost money over the last 12 months, so no P/E.
- AAOI: EV/EBITDA is not meaningful (n/m) — its cash exceeds its market value plus debt, or the business lost money before depreciation.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
It has lost money and has no full fiscal year on file since its history starts, so it has no P/E history.
- Nowlost money
- Now: no P/E — it lost money over the last 12 months.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $2 a share — 88% below the $17.68 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $2 | 88% below $17.68 |
| Levered | $6 | 67% below $17.68 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.