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12 Months On From $22.25 Float Price Sonos Share Value Slumps 29%

Sonos shares have been steadily falling with the Company now banking on a new range of products to drive up their share price which has fallen 29% in the last year.

Retailers in Australia believe that demand for Sonos products have “waned” and are more in “decline” that trending upwards.

Sonos went public in August 2018, after settling for a lower-than-sought valuation of about $1.5 billion and after several VC funds had rejected funding the Company.

A sceptical reception from potential investors on its roadshow led it to bump its valuation down before pricing its shares at $15.

They peaked on their second day of trading to above $22.25, since then it’s been largely downhill ever since to finish at $12.99.

The Company who has a policy of taking on media Companies who don’t tow the Sonos party line is struggling to compete up against new products from Amazon, Google, Bowers & Wilkins, Heos as well and Sony.

They will also have to compete up against a new and “significantly cheaper” network speaker from Apple as well as a new speaker from Bose that has already excited retailers.

Since they floated 12 months ago Sonos has been a pretty uninspiring performer with the Company struggling to deliver profits or a clear product growth path this has led to a diverse set of views by analysts.

ChannelNews has been told that Harvey Norman is looking to take on a premium branded network speaker to try and replace lost Sonos sales.

Unlike the Sonos offering the range is from a leading sound Company and delivers 24-bit audio.

The move comes as retailers look to range products that are from Companies that unlike Sonos, are not investing in selling direct online and can deliver superior margins.

While some analysts are recommending “A buy” others are dumping the stock.

A brand-new contributor to the Sonos bottom line has been a deal cut with IKEA which is showing healthy initial demand.

The SYMFONISK is a line of Sonos bookshelf speakers and table lamps that double as Wi-Fi audio systems, and while the deal will scale Sonos sales it is not necessarily going to deliver “great profitability” claim analysts.

This is a US Company pioneered the high-end wireless audio market but despite having the market to themselves they were still unable to make a profit which is why the Company is mistrusted by investors.

Analysts are now looking at a glut of subsidized smart speakers along with new superior competitors and start to wonder how Sonos can compete.

There is some light at what a very dark tunnel journey for the US sound Company has been, revenue has moved higher and it’s on track to stretch that streak in fiscal 2019.

Revenue soared a better-than-expected 25% in its fiscal third quarter.

The shares moved higher following this month’s earnings news despite a slight drop in full-year guidance.

Sonos now sees $1.25 billion to $1.26 billion in revenue in its fiscal year that ends next month, 10% to 11% growth over fiscal 2018.


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