Sonos ( NASDAQ: SONO ) fell sharply after cutting revenue and adjusted EBITDA estimates for the full year with inflation a major headwind. The stock is not seeing a rush of analysts recommending that investors buy the dip.
Morgan Stanley stayed cautious on Sonos ( SONO ) after the company's earnings report and guidance showed that it is not immune to the macro challenges faced by consumers and retailers.
Analyst Erik Woodring and team said they still believe in Sonos' LT growth story, but the stock is seen being unloved by investors as the company works through near-term demand/macro challenges and looks to rebuild investor confidence in a return to double-digit revenue growth.
Morgan Stanley reset expectations on SONO after the earnings update.
"Following the June Q results, our FY22 revenue and Adj. EBITDA fall 11% and 26%, respectively, while our FY23 revenue growth outlook is much more muted at just +3% Y/Y (vs. +6% Y/Y previously, but off a much higher revenue base)."
The firm kept an Equal-weight rating and reduced its price target to $20 from $28. Elsewhere on Wall Street, Stifel lowered its PT to $20 from $24, while Raymond James and Bank of America also posted cautious updates on the stock.
Shares of Sonos ( SONO ) fell 16.45% in premarket action to $19.03.
Read more details about the Sono Q2 earnings report and dig into the earnings call transcript.
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Sonos spins lower as analysts reel in expectations