Rosenblatt Securities has reiterated a Buy rating on Sonos Inc. and kept a price target of $21.00, underscoring the research firms view that the audio equipment maker delivered another solid quarter despite what it called margin pressure from tariffs and wider macroeconomic headwinds.
At the time of the note Sonos shares were trading at $14.63. A Fair Value assessment included in available data places Sonos in an undervalued position, with analyst targets ranging from $17.50 to $21.00.
Rosenblatt highlighted that Sonos produced "another strong beat" in the December quarter, navigating cost and margin challenges while trimming expenses and generating robust free cash flow. The company posts a healthy 7% free cash flow yield and carries more cash than debt on its balance sheet, according to published metrics.
Looking ahead to the upcoming second quarter, Sonos provided revenue guidance that aligned with expectations and delivered an Adjusted EBITDA forecast that Rosenblatt described as "materially ahead" of projections. The research firm also expressed optimism about potential product introductions in the second half of the year, which it sees as a possible driver of growth and incremental upside for the business.
Rosenblatts $21 price objective is predicated on a 12x EV/CY26 EBITDA multiple, a multiple the firm characterizes as "conservative" in light of Sonos brand strength, innovation track record and cash flow characteristics. The note observed that Sonos currently trades at approximately 8x EV/CY26 EBITDA. Separately reported data shows the companys current EV/EBITDA ratio at 16.0x based on trailing twelve months results.
In more recent financials, Sonos reported first-quarter 2026 results that notably exceeded expectations. The company posted non-GAAP earnings per share of $0.93, a figure 93.75% above the consensus estimate of $0.48. Revenue for the quarter came in at $546 million, outpacing the anticipated $523.21 million and representing a 4.36% surprise to the upside.
Despite the stronger-than-expected earnings and revenue, Sonos stock closed lower following the release. There were no updates regarding mergers or acquisitions, and no recent analyst upgrades or downgrades were reported in connection with the results.
The combination of margin pressure tied to tariffs, macroeconomic headwinds and the companys ability to convert earnings into free cash flow are central to Rosenblatts current stance. The firm views the balance sheet and free cash flow performance as constructive elements supporting its valuation framework, while also flagging the potential for additional growth if new products perform as anticipated in the second half of the year.