Sonos: Lost The Battle Before It Started

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About: Sonos, Inc. (SONO), Includes: AAPL, AMZN, GOOGL
by: Nascent Trader
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Nascent Trader
Long/short equity, Growth, momentum, research analyst
Summary

The company's only economic moat is protected by patents that are expiring in 2026.

Sonos failed to catch up with the voice-recognition trend; the company's relevance is at other companies' discretion.

$1bn market cap makes it an expensive acquisition target.

Source: Sonos

Recommendation

We recommend selling Sonos (SONO) as it is fairly valued now according to our DCF model (suggesting $9.74). We do, however, have a bearish view of the company in the