Why Sonos Stock Is Surging Thursday

Sonos Inc SONO shares are trading higher Thursday after the company reported first-quarter results that easily topped analyst expectations.

What Happened: Sonos said fiscal first-quarter revenue increased 1.2% year-over-year to $672.6 million, which beat average analyst estimates of $587.95 million, according to Benzinga Pro.

The company reported quarterly earnings that nearly doubled expectations. Sonos turned in first-quarter earnings of 79 cents per share, which beat consensus estimates of 40 cents per share. 

Free cash flow totaled $167.6 million in the quarter. Inventories were down 33% sequentially to $306.1 million.

"We entered the quarter with our healthiest in-stock inventory position in three years which allowed us to meet the tremendous customer response to our industry-leading product portfolio and gain share across our key categories and geographies," said Patrick Spence, CEO of Sonos.

"Looking ahead, we remain on track to deliver against our fiscal 2023 guidance as we build upon our momentum and prepare to launch multiple new products this year. While significant macroeconomic uncertainty remains, my conviction in the long-term potential of Sonos has never been stronger," Spence added.

Sonos sees full-year 2023 revenue in a range of $1.7 billion to $1.8 billion versus estimates of $1.73 billion.

Following the company's quarterly results, Morgan Stanley analyst Erik Woodring maintained Sonos with an Equal-Weight rating and raised the price target from $17 to $20.

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SONO Price Action: Sonos has a 52-week high of $31.22 and a 52-week low of $13.65.

The stock was up 14.7% at $20.48 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Sonos.