SONO
Sonos, Inc.
$15.51
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 66.1% above fair value
You pay
$15.51
Bear
$8.28
Fair
$9.34
Bull
$10.27
Bear
$8.28
-46.6%
3% stage 1 growth, 12% discount
Fair
$9.34
-39.8%
6% stage 1 growth, 12% discount
Bull
$10.27
-33.8%
7% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
31%
Implied Market Multiple
35.7x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $19.50 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $9.34 per share.
Warnings
Wall Street's average price target is $19.50 (from 9 analysts). Our estimate is 65% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions