SONO
Sonos, Inc.
$14.57
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 61.2% above fair value
You pay
$14.57
Bear
$8.02
Fair
$9.04
Bull
$9.94
Bear
$8.02
-45.0%
3% stage 1 growth, 12% discount
Fair
$9.04
-38.0%
6% stage 1 growth, 12% discount
Bull
$9.94
-31.8%
7% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
31%
Implied Market Multiple
33.3x
Market is pricing in (growth)
17.8%
vs 5.5% base
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 $18.00 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $9.04 per share.
Warnings
Wall Street's average price target is $18.00 (from 9 analysts). Our estimate is 62% 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