Sonos’ Fiscal Q4 Earnings Beat Estimates; Shares Rise

Shares of Sonos (SONO) jumped 2.2% in the extended trading session on Wednesday after the American developer and manufacturer of audio products posted a surprise profit for the fourth quarter of Fiscal Year 2021 against analysts’ loss expectations. Meanwhile, revenues missed the consensus estimate.

Don't Miss our Black Friday Offers:

Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

Quarterly Results in Detail

The company reported adjusted earnings of $0.08 per share against the Street’s loss estimate of $0.06 per share. Sonos had reported adjusted earnings of $0.33 per share in the same quarter last year.

Total revenue of $359.5 million missed the Street’s estimate of $360.23 million but grew 6% year-over-year.

Adjusted EBITDA came in at $17.1 million, compared to $46.4 million in the same quarter last year. Additionally, adjusted gross margin stood at 45.7%, down from 48.3% in the year-ago period. (See Sonos stock charts on TipRanks)

Fiscal 2021 Results

For Fiscal Year 2021, revenues came in at $1.72 billion, up 29% year-over-year. Adjusted earnings increased to $1.77 per share from $0.67 per share in the prior year.

Additionally, adjusted EBITDA grew 157% year-over-year to $278.6 million. At the year-end, total households increased 15% year-over-year to 12.6 million.

Capital Deployment

Sonos’ Board of Directors has authorized a common stock repurchase program of up to $150 million.

Since September 2019, the company has completed $100 million in stock repurchases, including a $50 million stock repurchase in the fourth quarter of Fiscal Year 2021. Under the prior authorizations, the company repurchased 5.2 million shares at an average price of $19.30 per share.

Guidance

The CEO of Sonos, Patrick Spence, said, “Demand for our products remains stronger than ever, and we are entering fiscal 2022 with a significant backlog due to the continued industry-wide supply constraints. Despite these supply constraints, we expect to deliver another strong year in fiscal 2022, including 16% revenue growth and 17% adjusted EBITDA growth at the high end of our outlook.”

“The powerful momentum we are experiencing in our business puts us ahead of schedule for reaching the fiscal 2024 financial targets introduced at our investor event last March. As we look forward, we are confident in our ability to deliver an approximately 13% revenue CAGR, 45% to 47% gross margin, and 15% to 18% adjusted EBITDA margin through fiscal 2024,” Spence added.

For Fiscal Year 2022, the company projects revenue to be in the range of $1.925 billion to $2 billion versus the consensus estimate of $1.86 billion. Adjusted EBITDA is projected to be in the range of $280 million to $325 million, representing growth of 1% to 17%.

See Insiders’ Hot Stocks on TipRanks >>

Wall Street’s Take

Overall, the stock has a Strong Buy consensus rating based on 3 unanimous Buys. The average Sonos price target of $49.67 implies 48.4% upside potential from current levels. Shares have gained almost 96% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Sonos’ performance.

According to the tool, the website of the company recorded a 0.01% monthly rise, year-over-year, in global visits in October. Meanwhile, year-to-date website growth, compared to year-to-date website growth in the previous year, is at 5.82%.