SOND - Sonder Holdings falls after Oppenheimer warns on profitability timeline

2023-05-22 09:02:47 ET

Sonder Holdings ( NASDAQ: SOND ) fell in early trading on Thursday after Oppenheimer cut its rating on the hospitality stock to a Perform rating from Outperform on what it now sees as a longer timeline for free cash flow to inflect positive.

Analyst Joshua Marin and team see inherent value in Sonder's ( SOND ) brand, unique accommodation value proposition, and improving profitability/free cash flow trends, but the longer timeline impacted the near-term rationale for valuation.

"Additionally, with shares trading below $1, we expect continued pricing volatility that is not entirely driven by company fundamentals."

Marin said the firm would get more constructive on Sonder ( SOND ) with better visibility into the timing of free cash flow inflecting positive and believe that introducing EBITDA guidance as a bridge would support investor understanding of the improving profitability narrative.

Looking down the road, potential share price catalysts seen for Sonder Holdings ( SOND ) include supply agreements, accelerated adoption of alternative accommodations especially as urban markets reopen, and contracted unit execution and live unit conversion.

Shares of Sonder Holdings fell 5.92% in premarket trading to $0.62.

More on Sonder Holdings:

• Sonder Holdings earnings call transcript
• Growth metrics on Sonder Holdings
• Relative strength index and moving averages
• Seeking Alpha's Quant Rating for Sonder Holdings

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