Sonos Inc (SONO) stock analysis
Close on Nov 11, 2026Market cap $2.25BP/E 42.4Yield –
StockData Score
Prices as of Nov 11, 2026How the score works
Mixed13 of 30 checks passed
Sonos passes 13 of the 30 checks behind our score; 9 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.
- Valuation
- 1/6
- Growth
- 2/6
- Past performance
- 4/6
- Financial health
- 6/6
- Dividend
- 0/6
What stands out
Return on capital over 10%
Return on invested capital was 26.8%, above the 10% that usually covers the cost of capital.
No debt
Sonos has no borrowings on its latest balance sheet.
Interest well covered
Operating income covers interest expense 143.7 times.
Debt covered by cash flow
There is no debt to cover.
What to watch
Margin of safety under 20%
The price is 19.6% above fair value, so there is no margin of safety.
Trading above fair value
The share price of $19.06 is above our fair value estimate of $15.94.
Return on equity under 15%
Return on equity was 14.2% over the last twelve months and averaged 4.6% over five years; we look for 15% on both.
Revenue growing under 10% a year
Revenue grew -6.3% a year over the last three fiscal years, short of the 10% we look for.
Valuation1/6
P/E above its 5-year median
Sonos's P/E of 42.4 is above its own 5-year median of 31.1.
P/E above the industry
Sonos's P/E of 42.4 is above the Electronic and Other Electrical Equipment and Components, except Computer Equipment median of 32.5.
EV/EBITDA below its 5-year median
Sonos's EV/EBITDA of 17.6 is below its 5-year median of 22.1.
P/B above the industry
Sonos's price-to-book of 5.59 is above the Electronic and Other Electrical Equipment and Components, except Computer Equipment median of 3.01.
Trading above fair value
The share price of $19.06 is above our fair value estimate of $15.94.
Margin of safety under 20%
The price is 19.6% above fair value, so there is no margin of safety.
Growth2/6
Revenue growing under 10% a year
Revenue grew -6.3% a year over the last three fiscal years, short of the 10% we look for.
EPS growth over 3 years
Needs positive EPS three years ago and today.
Earnings acceleration
Needs positive net income now, a year ago and five years ago.
Growing faster than the industry
Revenue grew 5.6% over the last twelve months; the Electronic and Other Electrical Equipment and Components, except Computer Equipment median is -3.5%.
Company guidance
No outlook found in earnings releases from the last twelve months.
Gross margin improving
Gross margin was 46.5% over the last twelve months, against 43.1% a year earlier.
Past performance4/6
Return on equity under 15%
Return on equity was 14.2% over the last twelve months and averaged 4.6% over five years; we look for 15% on both.
Return on capital over 10%
Return on invested capital was 26.8%, above the 10% that usually covers the cost of capital.
Return on equity above the industry
Sonos's return on equity of 14.2% is above the Electronic and Other Electrical Equipment and Components, except Computer Equipment median of 0.4%.
Earnings over 5 years
Needs positive net income five years ago and in the latest year.
Net margin above its 5-year average
Net margin was 3.8% over the last twelve months, against a 5-year average of 1.1%.
Net margin above the industry
Sonos's net margin of 3.8% is above the Electronic and Other Electrical Equipment and Components, except Computer Equipment median of -0.2%.
Financial health6/6
No debt
Sonos has no borrowings on its latest balance sheet.
Debt not rising
With no debt today, leverage cannot have risen.
Debt covered by cash flow
There is no debt to cover.
Interest well covered
Operating income covers interest expense 143.7 times.
Short-term assets cover short-term debts
Current assets are 1.61 times current liabilities.
Low bankruptcy risk
The Altman Z-score is 5.04; above 3 is the safe zone and below 1.8 the distress zone.
Dividend0/6
No dividend
Sonos has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.
Fair value
How we estimate itOur estimate per share
$15.94
The share price is 20% above this estimate.
| Method | Multiple used | Own 5Y median | Industry median | Value per share | Weight |
|---|---|---|---|---|---|
| P/E | 31.8× | 31.1× | 32.5× | $14.31 | 40% |
| EV/EBITDA | 21.5× | 22.1× | 20.9× | $22.89 | 35% |
| P/B | 3.5× | 4.0× | 3.0× | $11.93 | 10% |
| Earnings power | 12.4% cost of equity | – | – | $6.74 | 15% |
| Fair value | $15.94 | 100% | |||
Valuation over time
Using the earnings and balance sheet published at each date, not today's.
- P/E at month end
- Own 5-year median 31.1
- Electronic and Other Electrical Equipment and Components, except Computer Equipment median 32.5
An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.
Market risk
From the past year of daily prices.
Liquidity
Low risk
- Average value traded per day
- $29.83M
- Value traded per 1% price move
- $12.44M
Downside
Medium risk
- Typical loss in a bad month
- 18.4%
- Volatility (annualized)
- 49%
- Sharpe ratio, 1 year
- 0.20
- Beta to the S&P 500 (5Y)
- 1.51
Typical bad-month loss, week by week
Margins
Share of revenue, fiscal years 2015 to 2025
Gross margin
Operating margin
Net margin
Growth rates
Compound annual growth to fiscal 2025
| Per year | 1 year | 3 years | 5 years | 10 years | Five-year pace |
|---|---|---|---|---|---|
| Revenue | -4.9% | -6.3% | +1.7% | +5.5% | |
| Gross profit | -8.5% | -7.5% | +2.0% | +5.1% | |
| Free cash flow | -19.7% | – | -3.4% | – |
Returns and balance sheet
10 fiscal years. Hover a measure to see how it is calculated.
| Measure | FY2016 | FY2020 | FY2025 | Trend |
|---|---|---|---|---|
| Return on equity | 157.1% | -7.0% | -15.6% | |
| Return on assets | – | -2.5% | -7.0% | |
| Current ratio | – | 1.68 | 1.43 | |
| Debt to equity | – | 0.08 | – | |
| Net debt to EBITDA | – | -41.59× | – | |
| Interest coverage | – | -18.3× | -108.5× | |
| Inventory turnover | – | 3.8× | 4.0× | |
| Capex to revenue | 5.8% | 2.5% | 2.0% | |
| Diluted shares | 54M | 110M | 121M |
Where the cash went
Fiscal 2021 to 2025, five years combined
Sonos generated $708.67M from operations and spent $736.16M on capital expenditure, dividends and share buybacks. 31% of that went back into the business.
DuPont analysis
Return on equity split into margin, efficiency and leverage
| Fiscal year | Net margin | Asset turnover | Equity multiplier | Return on equity |
|---|---|---|---|---|
| FY2025 | -4.2% | 1.66× | 2.22× | -15.6% |
| FY2024 | -2.5% | 1.58× | 2.03× | -8.1% |
| FY2023 | -0.6% | 1.51× | 2.03× | -1.9% |
| FY2022 | 3.8% | 1.51× | 2.06× | 11.9% |
| FY2021 | 9.2% | 1.76× | 2.26× | 36.6% |
| FY2020 | -1.5% | 1.68× | 2.73× | -7.0% |
| FY2019 | -0.4% | 1.87× | 2.76× | -1.9% |
| FY2018 | -1.4% | 2.30× | 4.74× | -15.0% |
Piotroski F-Score
Nine tests of profitability, balance sheet and efficiency, fiscal 2025 against fiscal 2024
- ProfitableNet income above zero-$61.14M
- Cash generatingOperating cash flow above zero$136.87M
- Return on assets improvedROA up on the prior year-3.8% → -6.7%
- Earnings backed by cashOperating cash flow above net income$136.87M vs -$61.14M
- Less leverageLong-term debt to assets fell– → –
- Better liquidityCurrent ratio rose1.51 → 1.43
- No dilutionShare count did not rise123M → 121M
- Gross margin improvedGross margin up on the prior year45.41% → 43.69%
- More efficientAsset turnover rose1.51 → 1.58
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