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Sonos (SONO) to Report Q3 Earnings: What's in the Cards?

Sonos, Inc. SONO is scheduled to report third-quarter fiscal 2020 results on Aug 5, after the closing bell. In the March-end quarter, the company reported negative earnings surprise of 77.8%.

The Santa Barbara, CA-based multi-room audio products maker is expected to have recorded lower revenues on a year-over-year basis. This might have been primarily due to economic disruptions stemming from the COVID-19 pandemic.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly announcement.

Factors at Play

During the quarter under review, Sonos launched Sonos Radio — a streaming radio service — exclusively for customers in more than 10 million homes around the world. Also, the company introduced Sonos Arc, a premium smart soundbar that brings immersive, cinema-quality sound to homes.

Such developments are likely to have had a positive impact on the company’s fiscal third-quarter top line. Sonos’ inventory levels are expected to have normalized in the quarter. It witnessed an increase in online sales, which partly offset the impact of the pandemic on consumer demand as well as retail partner store closures, driven by its ‘At Home with Sonos’ program.

For the June-end quarter, the Zacks Consensus Estimate for aggregate revenues is pegged at $234 million that indicates a decline of 10% from the year-ago quarter’s reported figure. Adjusted loss per share is pegged at 29 cents, which calls for deterioration of 123.1% from the prior-year quarter’s recorded figure.

What Our Model Says

Our proven model predicts an earnings beat for Sonos this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Sonos’ Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +86.21% as the former is pegged at a loss of 4 cents and the latter at a loss of 29 cents.

Sonos, Inc. Price and EPS Surprise

Sonos, Inc. Price and EPS Surprise

Sonos, Inc. price-eps-surprise | Sonos, Inc. Quote

Zacks Rank: Sonos carries a Zacks Rank #3, at present.

Other Stocks to Consider

Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter.

Vista Outdoor Inc. VSTO is slated to release first-quarter fiscal 2021 results on Aug 6. It has an Earnings ESP of +1,300.12% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Verra Mobility Corporation VRRM is scheduled to release second-quarter 2020 results on Aug 6. The company has an Earnings ESP of +133.33% and a Zacks Rank #2.

SailPoint Technologies Holdings, Inc. SAIL has an Earnings ESP of +66.67% and carries a Zacks Rank of 2. The company is set to report second-quarter 2020 results on Aug 6.

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Sonos, Inc. (SONO): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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